The "World's Greatest Growth Portfolio" Lives Up to Its Name
In just 12 short days, 2012 will come to an end, and so, too, will the inaugural year of "The World's Greatest Growth Portfolio." Originally formulated to help family and friends build out a sensible portfolio that focused on innovative companies built to last, the portfolio has more than lived up to it's name.
Read below to see what the 13 companies in this portfolio were, see why certain companies succeeded while others didn't, and hear about plans to reformulate the portfolio for next year, and at the end, I'll offer up access to a special premium report on one company I think is the best pick for 2013.
Measuring our performance
When investing, I tend to always take a long-term time horizon. That means investing with the idea that I'll be holding stocks for at least three to five years. So even though this portfolio performed well this year, I won't be celebrating overall success anytime soon.
When it came to this portfolio, I laid out a simple but powerful thesis: Invest first and foremost in companies that demonstrate exceptional levels of innovation, with special emphasis given to those that I believe will be around decades from now.
You'll see that I have three levels of investments, with different allocations for each level. The higher the allocation, the more certain I am the company will be leading its respective field a decade from now.
In a year where the S&P 500 has returned about 17.5% including dividends, here's how this portfolio has done.
Core | ||||
|---|---|---|---|---|
Company | Allocation | Jan. 1 balance | Current balance | Change |
Intuitive Surgical | 11.5% | $115.00 | $135.70 | 18% |
11.5% | $115.00 | $128.34 | 11.6% | |
Amazon.com | 11.5% | $115.00 | $172.96 | 50.4% |
Whole Foods | 11.5% | $115.00 | $155.83 | 35.5% |
lululemon athletica | 7.5% | $75.25 | $124.46 | 65.4% |
Apple | 7.5% | $75.25 | $100.01 | 32.9% |
Westport Innovations | 7.5% | $75.25 | $62.53 | -16.9% |
IPG Photonics | 7.5% | $75.25 | $142.30 | 89.1% |
Baidu | 5% | $50.00 | $42.35 | -15.3% |
Zipcar | 5% | $50.00 | $31.15 | -37.7% |
Stratasys | 5% | $50.00 | $123.75 | 147.5% |
MAKO Surgical | 5% | $50.00 | $25.35 | -49.3% |
Solazyme | 5% | $50.00 | $35.80 | -28.4% |
Total | 100% | $1,000.00 | $1,280.53 | 28.1% |
Source: Fool.com.
As you can see, the allocations worked out pretty well. Core companies, paced by Amazon's impressive 50% increase, were all positive for the year.
Three out of four Tier One companies beat the market, with the lone outlier being Westport Innovations. As a whole, Tier One companies returned an average of almost 43%, which is very impressive.
And the Tier Two companies -- those which were highly innovative, yet not necessarily dominant in their respective fields -- were clearly appropriately allocated. Only one stock -- 3-D printer Stratasys -- was able to prop these companies up, as the rest were in the negative, with MAKO Surgical leading the way. All things considered, it was a good thing that these stocks received the lowest allocations.
Looking ahead
Over the past 12 weeks, I've been reviewing every single stock in this portfolio, as well as a few that I'm considering adding. You can read up on every one of my reviews by clicking here, and examining the links at the bottom of the page.
Overall, 10 of these 13 stocks will be staying, and three new ones will be added. The important thing to note is that the Core, the Tier One, and the Tier Two stocks will all be arranged differently. Keep your eyes peeled next week, as I'll be revealing each level for Fools to see. And feel free to comment below on which stocks you think should go, and which should stay.
In the meantime, I suggest you read up on one of the best buys I think the market is offering up right now: Chinese search engine Baidu.
Regardless of your short-term view on the Chinese economy, there may be opportunity in Baidu (aka the "Chinese Google"). Our brand-new premium report breaks down the dominant Chinese search provider's strengths and weaknesses. Just click here to access it now.
The article The "World's Greatest Growth Portfolio" Lives Up to Its Name originally appeared on Fool.com.
Fool contributor Brian Stoffel owns shares of Apple, Amazon.com, Google, Intuitive Surgical, Stratasys, Lululemon Athletica, Whole Foods Market, Westport Innovations, IPG Photonics, MAKO Surgical , Zipcar, Solazyme, and Baidu. The Motley Fool owns shares of Apple, Amazon.com, Baidu, Google, IPG Photonics, Intuitive Surgical, MAKO Surgical , Stratasys, Solazyme, Whole Foods Market, Westport Innovations, and Zipcar. Motley Fool newsletter services recommend Apple, Amazon.com, Baidu, Google, IPG Photonics, Intuitive Surgical, Lululemon Athletica, MAKO Surgical , Stratasys, Whole Foods Market, Westport Innovations, and Zipcar. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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