It's Time to Revisit 25 for '99

Last year about this time, I posted a list of 25 stocks I thought you'd enjoy watching during the upcoming year. This list of 25 for '99 included mainly tech stocks -- surprise! -- but also had a few nontech entries I thought would do well, would illustrate the process of migrating all or part of a bricks-and-mortar business to the Web and would provide some benchmarks for judging the performance of the tech issues.

The "Seymour Portfolio": Join the discussion on TSC Message Boards

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Tech Savvy.

That list was not intended as a literal portfolio, for at least two reasons. First, because our job isn't to pick model portfolios for you, but to give you the information you need to craft your own portfolios. And second, because since this was not going to be changed or updated during the year, it was a static list, which could easily become an albatross around my neck -- and the neck of anyone who thought it safe to buy all 25 issues, salt 'em away and forget about 'em.

(Note that this is worse, even, than the classic "unmanaged" index fund, which at least revises its portfolio over time to match the index it tracks. And because the list was fixed at the beginning of the year, no fat IPO gains. Sigh.)

Rather, these were stocks I thought would illustrate trends in the market -- in effect, pointers toward performance trends.

And I said that in the column.

My caveat notwithstanding, many TSC readers did see this as a recommended portfolio, and over the course of the year I've gotten several thousand emails from readers who wanted to discuss the stocks, who wondered how the group was doing and, lately, who wanted to thank me for helping them make money with the "portfolio."

Well, the news for those who decided to treat this list as a portfolio is, thankfully, good: The "Seymour Portfolio" was up more than 108% for the year last week. For some comparisons, over the same period, the Dow Industrials were up about 22%, the Nasdaq Composite was up 78%, the Russell 2000 was up about 13%, the S&P 500 was up about 17%, and the high-wire act called the Nasdaq 100 was up 92%.

Thank you, thank you, thank you. And no, I'm not starting up a new mutual fund to monetize (for me) the list's success (for you) of the picks. (But hey, I'm open to offers!) A fool claims credit for everything good that follows in his wake; a wise man acknowledges the role luck plays in his successes.

And you and I both know I was lucky here: I was at the right place (tech stocks) at the right time (an explosive boom year).

Rather than focusing on return, I think the real purpose of this list has been served even better: illustrating what's going on today in tech stocks. And as you'll see, I mean that in both negative and positive ways.

I grouped the list into four sets of stocks: Cisco (CSCO Quote), Microsoft (MSFT Quote), Lucent (LU Quote), Dell (DELL Quote), Merck (MRK Quote), and i2 Technologies (ITWO Quote) formed what I called the Technology group.

In a group called The Net, I lumped America Online (AOL Quote), Amazon.com (AMZN Quote), Yahoo! (YHOO Quote), Lycos (LCOS Quote), and Excite (now a part of the Excite@Home group, trading under the symbol (ATHM Quote).

Under Bandwidth, I listed Qwest (QWST Quote), AT&T (T Quote), MCI WorldCom (WCOM Quote), Global Crossing (GBLX Quote), Corning (GLW Quote), Broadcom (BRCM Quote), Aware (AWRE Quote), and Ciena (CIEN Quote).

And in a lumpy assemblage I called Retailing and E-Tailing, I listed Wal-Mart (WMT Quote), Gap (GPS Quote), Staples (SPLS Quote), Office Depot (ODP Quote), Home Depot (HD Quote) and Brookstone (BKST Quote).

(Note that I was long some of these stocks when that column ran, and am today long Qwest, AT&T, MCI WorldCom, Wal-Mart and Gap.)

You can certainly argue with my groupings, which I readily acknowledge are nontraditional (Merck in Tech?), just as you can argue against the inclusion of any of these companies ... or for others you think should have been on this list.

But overall, I think, this has been a useful exercise.

The overall return on this bundle was great. What it can teach us about the potentially huge but certainly dangerous year ahead is even more valuable. Tomorrow, I'll run down that list and try to figure out what it taught me this year.