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Best Stocks to Buy: My Rock Star Stock Portfolio Update

Have you dealt with the daunting task of handpicking best stocks to buy lately? We all have.

I am an avid fan of Mr. Bogle for his acumen to make index fund investing as a surefire path to prosperity. I’ve found an equally impressive friend, Jim Collins, who does an incredible job of simplifying investment puzzle for all of us. It was none other than Jim who recently commented on the original article I wrote about the best stocks to buy in early February.

He asked me if I wanted to give an update on my rock star portfolio —  a fantastic idea!

My portfolio of the best stocks to buy consists of these best of the breed fortune companies —  Apple, Google, Bidu, Intuitive Surgical, Chipotle Mexican Grill.

If you invested $10,000($20000 each)  in these five companies on February 4th, 2012, your portfolio would have earned 9.9% return year to date , or 13% annualized return. Not bad for a street smart investor to beat most of the so-called expert money managers on the Wall Street.

What to do now?

I believe that there is no room for emotions and ego when it comes to investment success. I’ve made lots of mistakes. The key is to be aware about your goal — to make money in the market.

With that said, I normally invest more money into stock that is performing better than the average market.

Yes, it may sound insidious to you, but I average up!

I think the underlying fundamentals of these stocks are still as valid as they were in February. These are the best stocks to buy in my opinion. Nonetheless, street smart approach is to evaluate industry changes and its impact on the supply and demand for each investment.

Chipotle Mexican Grill has not performed as well of lately due to food pricing and its heavy dependency on organic growers. Bidu still enjoys Google like power in China, but it has lagged the market mainly due to slowing Chinese economy and competitive pressure from another search engine.

A recent article in USA today claims that soaring knee surgeries — knee replacement surgeries has soared 161.5% among Medicare participants in the past 20 years – propel demand for the revolutionary Da Vinci Robotic surgery equipment from Intuitive Surgical. Indeed, ISRG will benefit from growing baby boomer population in the years to come.

Apple and Google are revolutionary companies. They both command leading market share in their respective industry. What makes America such a wonderful land is these entrepreneurs who are visionary.

Ford and General Electric revolutionized our world in early 1900′s.  Microsoft and Cisco revolutionized the computer industry in the late 1980′s. Now,  in the new millennium,  Apple and Google are seeing each other as the nemesis, but both companies have changed the world in a big way. How else can you find sixty years old and a seven years old sitting side by side in an Apple store to surf web using a new iPad? The transformation is real and incredible.

I have articulated my thoughts on how I picked these best stocks to buy in this article.  I keep investing in the company as long as those fundamentals remain valid.

Parting Thoughts:

You should invest only a part of your portfolio into equities. It’s important to invest in an Index fund to protect and grow your capital for the retirement.

Beware of those who preach you to buy stocks for life. It’s a great idea to hold your stock investment as long as you are passionate about it and do your due diligence. It’s no different from investing your capital in any other investment you may have.

Every investment is good only when it makes money for you. With that said, I don’t think daily price movement ought to make or break your mind about any investment. They key is to keep doing research on your own by knowing as much about any company you invest in.

Remember, you are not investing in a stock; you are investing in a company.

Readers: How do you invest? Do you have a strategy to pick best stocks for above average return? Let’s talk.

Elsewhere:

Stocks — Part X: What if Vanguard gets Nuked? @ Jlcollinsnh

The Average Rate of Return isn’t what You Really Earn @ Work Save Live

Pros and Cons of Investing in the Stock Market Today @ Modest Money

Why I’m Wary of Stocks @ My Money Counselor

How to Read and Evaluate Basic Stock Matrics @ My Money Design

Disclaimer: These are solely my own viewpoints. You should not follow my advice unless you have done your own research. I don’t guarantee that you will make money with these recommendations in the future.

 Photo by: Cornell University Library

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Comments (31)

Thanks for mentioning my “Why I’m Wary of Stocks” Shilpan. I do like your Rock Stars!

I really enjoyed your article, Kurt! I recommend everyone to read Kurt’s article before investing your hard-earned money on the Street.

[...] would be great, they all have great numbers and will make lots of money.Powered by Yahoo! AnswersDaniel asks…What's the best stock to purchase right now on the market?I want to invest in a stock …nt">What's the best stock to purchase right now on the market?I want to invest in a stock — ~$5000 [...]

Very interesting, Shilpan. Thanks!

Two home runs, a base hit and a couple of misses. Tough business picking stocks.

I gather you still like all five companies and AAPL is still your top pick?

Absolutely. I believe that Apple is still one of the greatest companies of this millennium.

I actually am thinking to write a post on how you can make fortune by finding a revolutionary company and sticking with it for a decade or more to build wealth.

Imagine, whoever bought Apple in early 2004 is sitting on a windfall profit. Only few hundred shares can make you wealthy.

since Apple’s climb began in 2004, we have two years left?

:)

great post idea! I look forward to that one.

Couldn’t agree more with Shilpan, seeing the climb they’ve made since 04/05 is incredible. I’m so jealous of the buyer back then! ahh!

That’s for sure. Those who accumulated Apple shares since 2004 are enjoying return in 4000+% range.

[...] I’m pleased that my three-part stock series continues to get quite a bit of attention. Shilpan at the inspiring blog Street Smart Finance mentioned “Why I’m Wary of Stocks” in a post updating readers on a “Rock Star Portfolio“. [...]

Interesting picks and good returns Shilpan! Thanks for posting an update on the portfolio.

Just curious, if we have a bear market, how would you adjust your portfolio?

Great to hear from you, MC! I consider bear market as GDP contraction for three quarters in a row. As I’ve mentioned, no stocks are good unless they make you money. With that said, my approach is to not add anymore to position until markets turn around.

I’m still on the index funds. In your opinion, what things should you be invested in before you take the step into individual stocks?

Index fund is the best and safest way to invest, so any Vanguard index stock or bond fund is the right way to begin. So, you are doing great, Kim!

Wow I can’t believe Apple and Google have climbed that much. It’s crazy how much they’ve changed the world that we live and blog in.

I enjoyed reading your Yakezie member post btw. Congrats!

Thank you, Sydney! I really appreciate your kind words.

When it comes to stocks, I’m clueless. It’s good to see your success, though! And thanks for the extra reading…all of those guys rock.

I think it’s never too late to invest!

Considence that the date you picked is my birthday (Feb 4)?

Who would have guessed that Google was going to have the run up they did this year? Apple was already on fire, but Google was sitting silently. 13% overall isn’t bad!

Happy belated birthday, MMD!

I heard Google made a new all time high. Good pick!

Thanks for visiting, Bill

Great update. I’m impressed to see that you’re a momentum investor! Hopefully the 4th quarter gives you some more momentum….

Thank you, Joe!

Einhorn or Vickers! Who’s right about Chipotle??

Although Einhorn has some valid arguments, I think he is wrong on Chipotle.

Good name for a portfolio, Shilpan. And great resource on the photograph, I’ve bookmarked it.

Thanks, 101C! I love that picture too!

[...] Best Stocks to Buy: My Rock Star Stock Portfolio Update on Street Smart Finance [...]

[...] Best Stocks to Buy: My Rock Star Stock Portfolio Update Have you dealt with the daunting task of handpicking best stocks to buy lately? We all have. I am an avid fan of Mr. Bogle for his acumen to make index fund investing as a surefire path to prosperity. I've found an equally impressive friend, Jim Collins,… Read more [...]

The one stock on the list that I would not buy would be apple.

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