How I'm Beating the Market By 20%
Sep 24th 2012 6:10PM
Updated Sep 24th 2012 6:14PM
Apple (NAS: AAPL) dominated the headlines again, this time because of sales of the iPhone 5. Historical patterns suggest the Mac maker could end the weekend having sold 8 million units of its newest handset, doubling the previous record held by the iPhone 4S last year.
Go ahead and pick your superlative. Apple's performance fits the description. And yet, for all its amazing growth over the past month, Google (NAS: GOOG) has outperformed the Mac maker in a key area: stock returns. Shares of the search king are up 8.4% versus 4.7% for Apple. Both stocks are up on the Nasdaq and the S&P 500.
Baidu (NAS: BIDU) hasn't been as fortunate. The Chinese search star has seen its shares fall 3.9% over the past week on concerns that regional rival Qihoo 360 would take market share -- fears that Deutsche Bank analysts confirmed in a report issued Tuesday.
But is that really so bad? Even if Baidu is losing some ground, Deutsche and others still see the company controlling 75% to 80% of China's search market. Qihoo isn't exactly thriving, either: its share of the market teeters between 5% and 10%. Investors have been net sellers, pushing the stock down more than 5% over the past five trading days.
Salesforce.com (NYS: CRM) suffered a similar fate. Despite keynotes from Sir Richard Branson and Anthony Robbins during this week's Dreamforce conference, along with the much-anticipated release of the company's Work.com human resources platform, the stock ended the week off 2.7%. So be it. As long as customers love what Salesforce is selling -- and that seems to be case -- long-term shareholders will profit.
What's the big idea?
For those unfamiliar with this weekly series, I'm going head-to-head with Mr. Market in a three-year showdown to see who's better at producing returns for investors. Here's where I stand as of this writing:
|S&P 500 SPDR||$126.50**||$145.87||15.31%|
Source: Yahoo! Finance. *Tracking began at market close on Jan. 6, 2012. **Adjusted for dividends and other returns of capital.
My portfolio's lead widened by another 1.5 percentage points, thanks partly to modest declines across the stock market. The Russell 2000 led the indexes lower, sliding 1.06% for the week, as the S&P 500 fell 0.38%, CNBC reports. Both the Dow and Nasdaq recorded marginal losses, ending off 0.10% and 0.13%, respectively, over the last five trading days.
Blame the Fed for the market's failure to rally further. Investors who've seen weeks of gains took profits with no stimulus or other catalysts in place to drive the market higher.
Spain highlighted an otherwise quiet trading week. German Finance Minister Wolfgang Schaeuble told CNBC that the country's banking system wouldn't need a sovereign bailout on top of earlier help. As a group, EU regulators are weighing their options for a new Spanish rescue program that could be unveiled as soon as next week, London's Financial Times reported.
Finally, shares of Research In Motion (NAS: RIMM) took another beating when its European servers went down on Friday morning, resulting in a three-hour outage. The stock fell more than 6% on the news, and is now off more than 55% year to date.
How to profit from the iPhone 5
RIM's loss could very well be Apple's gain, presuming customers are willing to be patient with a pair of hiccups in iOS 6. Will the new device be a winner? As a shareholder, I'm hoping so.
And yet you needn't own Apple to profit from the iPhone 5. Foolish colleague Evan Niu is out with new research on the device's most likely component suppliers. It's included as a free bonus to subscribers to the Fool's new Apple research report. Sign up today, and you'll get the initial report plus the iPhone 5 bonus, and a year's worth of free updates. Click here to get started now.
See you back here next weekend for more tech-stock talk. In the meantime, if you'd like to tell us more about a rule breaker in the making that you believe is either being unfairly maligned or ignored, please leave us a comment in the space below.
The article How I'm Beating the Market By 20% originally appeared on Fool.com.Fool contributor Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team and the Motley Fool Supernova Odyssey I mission. He owned shares of Apple, Google, Rackspace Hosting, Riverbed Technology, and Salesforce.com at the time of publication. Check out Tim's web home, portfolio holdings and Foolish writings, or connect with him on Google+ or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader.The Motley Fool owns shares of Baidu.com, Apple, Google, and Riverbed Technology. Motley Fool newsletter services have recommended buying shares of Apple, Rackspace Hosting, Baidu.com, Salesforce, Google, and Riverbed Technology. Motley Fool newsletter services have recommended creating a bull call spread position in Apple. Motley Fool newsletter services have recommended shorting Salesforce. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.
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