Every year, I set out to find the most innovative companies with lasting competitive advantages, and put them into “The World’s Greatest Growth Portfolio.”
If, since this portfolio began in January 2012, you had invested $100,000 in the S&P 500, you would be sitting on a gain of $26,800 — not including dividends. But if you would have invested along with me in this growth portfolio, your gains would be quite a bit higher, at $31,500.
Since inception, this portfolio has returned 31.5%, beating the S&P 500 by 4.7 percentage points. Read on to see what happened this month to account the portfolio’s winning ways, and click on any company to see the original buy recommendation.
|Company||Allocation||Jan. 1 Balance||Current Balance||Change|
|Whole Foods Market ||11.5%||$115.00||$111.32||(3.2%)|
|lululemon athletica (NASDAQ:LULU)||5%||$50.00||$49.20||(1.6%)|
Barring a major product development by the end of the year, I’m thinking that Apple Inc. (NASDAQ:AAPL) will find itself out of this portfolio in 2014. It’s not that the company isn’t still quality, or selling for really cheap. Rather, its because I’m slowly becoming convinced that Steve Jobs represented the sustainable competitive advantage to Apple Inc. (NASDAQ:AAPL)’s innovation dominance.
I’ll concede that the Apple Inc. (NASDAQ:AAPL) ecosystem will do a lot to protect Apple Inc. (NASDAQ:AAPL)’s brand moving forward. But this growth portfolio is specifically for innovation. With its focus on capital return, Apple Inc. (NASDAQ:AAPL) seems to be more focused on being an income play than an innovation one.
Baidu.com, Inc. (ADR) (NASDAQ:BIDU)
The market clearly wasn’t impressed with what Baidu.com, Inc. (ADR) (NASDAQ:BIDU) had to offer in its earnings report. But I saw three nuggets that make me believe China’s largest search engine still has its best days in front of it. Among those reasons:
- The company is investing in where it counts, especially in mobile.
- Its earnings miss eased my crazy-China-fraud fears that numbers were being massaged by management.
- Baidu.com, Inc. (ADR) (NASDAQ:BIDU) continues to add new online marketing partners at a healthy clip.
Amazon.com, Inc. (NASDAQ:AMZN)