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A Timeless Lesson in Portfolio Management

Jason Moser
July 29, 2013

In June I celebrated Father's Day by putting together a portfolio of 10 stocks that remind me of my dad. It was just a way to say thanks to him for getting me interested in investing at such a young age. I also vowed to keep track of this portfolio, as I'm confident that through the years it will be a market-beater, making Mr. Market green with envy. Granted, it's only been a bit more than a month since its inception, but let's see where things stand today as we start winding down earnings season.

The score 
Out of all 10 stocks, only one is actually down on an absolute basis, and that's Google (NASDAQ: GOOG) (-0.1%). Six of the 10 are beating the market. The four losing to the market are Dick's Sporting Goods (-2.9%), Apple (NASDAQ: AAPL) (-1.3%), Google (-3.5%), and UPS (-2.9%). And on a simple, non-time-adjusted basis, if you invested $1,000 in each of the 10 picks, you'd have $10,556.68 today versus the $10,338.42 you'd have if you'd plunked it all down in the S&P 500. Not a bad start.

You got your winnahs
Ford (NYSE: F) has been one of the stronger performers, and that's for good reason. Things are looking up as quarterly revenue rose 15%, which resulted in bottom-line earnings growth of 19%,and management is seeing improving conditions in foreign markets like Europe and China. Ford is gaining market share, too. In fact its share jumped from 16.1% in June 2012 to 16.7% in June 2013. General Motors (NYSE: GM), on the other hand, lost market share, falling from 19.3% to 18.9% over the same time period.

And you got your losahs
They can't all be winners all of the time, though, and while I'm a big proponent of owning a basket of Amazon, Google, and Apple, two of those three are losing to the market right now. Google's most recent quarter wasn't a bad one by any stretch, but it did in fact miss estimates on both sales and earnings. One of the concerns investors have today is the downward trend in cost-per-click (the amount of money Google makes when people click on its ads). Cost-per-click was down 6% over the same quarter last year as the move to mobile continues to grow. However, on the upside, the total number of paid clicks continues to trend upward with growth of 23% over the same time period.

Apple has fallen from the market's good graces; the stock is down more than 36% from highs over $700 in the past year. We know Mr. Market doesn't like uncertainty, and as it stands, there are a lot of questions Apple must answer in regard to new products. Never mind the fact that its balance sheet is the envy of many countries, with almost $147 billion in cash and equivalents. And never mind that the company sold 31.2 million iPhones in the quarter, representing