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A Contrary Way to Find Your Next Big Winner
live (public) 0.00% March 20
As we continue to trawl for long term dividend payers that can be the
core of a long term investment portfolio, Adam Wiederman of the Motley
Fools looks into how you can find your next big winner.
While I am cautious about finding a big winner, it's not a terrible
idea to have some of your investments assigned to something that might
turn out to be the next Apple -- although it can turn into the next
no-name company that never did anything.
He mentioned eBay (EBAY), Amazon.com (AMZN), and Netflix (NFLX) as
companies who created and then dominated their niches. Once that was
done, they started expanding into adjacent niches, challenging the
giants in a way that many didn't see coming. I remember hearing a
presentation by Netflix CEO where he talked about not following the
crowd because they are not always right.
This is all fine so far and I know that each of these companies have
many fierce detractors but I am going to follow the line of thinking and
look at his two selections of companies with this potential.
- The first, OpenTable (OPEN), has the potential to revolutionize aspects of the restaurant industry. It currently sells electronic reservation software to restaurants and has a growing online reservation-taking platform that syncs up to a restaurant's books.
- The second company, Rackspace Hosting (RAX), was an early pioneer in managed server hosting. Now, it's successfully added on to that by offering cloud hosting as well.
As I look at these two companies I have some hesitation.
OpenTable doesn't sell anything and is a free service to the public so
it doesn't have the business experience to sell something directly to
the public. I agree that there are many areas of expansion -- discount
coupons, reservations for other types of businesses but I don't see a
big, long term bang.
Rackspace Hosting will have their hands full competing with the likes of
Amazon and Apple in cloud computing. There is the potential for them to
expand and there is serious money in hosting -- I am not sure where
they go from here -- but that's the trick.
| Asset | Fund in this portfolio | Price change* | Percentage |
|---|---|---|---|
| Asset1 | RAX (Rackspace Hosting Inc) | 0.0% | 45.18% |
| CASH | CASH (CASH) | 0.0% | 54.82% |
* Day change on 03/20/2017.
Previous
Since 05/26/2009
| Name | YTD* Return |
1Yr AR** |
3Yr AR** |
5Yr AR** |
10Yr AR** |
15Yr AR** |
|---|---|---|---|---|---|---|
| A Contrary Way to Find Your Next Big Winner | 0.0% | 20.2% | 3.1% | -0.3% | N/A | |
| VFINX (Vanguard (S&P 500) Index) | 7.9% | 27.1% | 8.5% | 13.8% | 12.5% | 14.6% |
| VBINX (Vanguard Balance (60% stocks/40% bonds) | 3.5% | 15.3% | 2.8% | 7.9% | 7.7% | 9.7% |
* YTD: Year to Date
** AR: Annualized Return
| Last 1 Week* | 1 Yr | 3 Yr | 5 Yr | 10 Yr | Since 05/26/2009 |
2017 | 2016 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010 | 2009 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Annualized Return(%) | 0.0 | 20.2 | 3.1 | -0.3 | NA | 17.5 | 0.0 | 10.5 | -25.1 | 24.0 | -25.5 | 60.5 | -0.3 | 90.3 | 51.5 |
| Sharpe Ratio | NA | 1.64 | 0.14 | -0.01 | NA | 0.52 | -16.51 | 0.63 | -1.33 | 0.68 | -0.65 | 1.85 | -0.01 | 2.36 | 1.39 |
| Draw Down(%) | NA | 8.3 | 41.0 | 48.4 | NA | 48.4 | 0.0 | 13.7 | 33.3 | 26.9 | 41.6 | 27.0 | 45.5 | 18.0 | 18.5 |
| Standard Deviation(%) | NA | 12.2 | 22.2 | 29.1 | NA | 33.6 | 0.0 | 16.5 | 18.9 | 35.2 | 39.5 | 32.7 | 45.0 | 38.2 | 37.0 |
| Treynor Ratio | NA | -11.84 | 1.4 | -0.01 | NA | 0.19 | 6.62 | 1.09 | -5.12 | -1.24 | -0.17 | 0.43 | 0.0 | 0.71 | 0.5 |
| Alpha | NA | 0.08 | 0.02 | -0.01 | NA | 0.04 | 0.0 | 0.04 | -0.11 | 0.12 | -0.25 | 0.14 | 0.02 | 0.22 | 0.16 |
| Beta | NA | -0.02 | 0.02 | 0.48 | NA | 0.92 | 0.0 | 0.1 | 0.05 | -0.19 | 1.52 | 1.39 | 1.3 | 1.28 | 1.03 |
| RSquared | NA | 0.0 | 0.0 | 0.04 | NA | 0.18 | 0.03 | 0.01 | 0.0 | 0.0 | 0.2 | 0.29 | 0.46 | 0.36 | 0.23 |
| Sortino Ratio | NA | 3.1 | 0.21 | -0.02 | NA | 0.73 | -3.26 | 0.96 | -1.71 | 1.04 | -0.76 | 2.96 | -0.01 | 3.67 | 2.3 |
| Yield(%) | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
| Dividend Growth(%) | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
*: NOT annualized;YTD: Year to Date
**Inception: starting from 05/26/2009
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