We know the future will be different from the past. But we tend to think it will be like the present. When we try to imagine the future, we often merely project the trends of the moment over the next 10 or 20 years.

And that's exactly the trap that the Future Fantastic 50 portfolio , my attempt to put together a list of stocks that will turn into tomorrow's blue chips in the next five years, fell into as it roared out of the gate in July 1999 and then flopped on its face from 2000 through 2002.

My crystal ball has worked better in the last two years. And in the year that ended on July 20, the Future 50 portfolio outperformed the S&P 500 and the Nasdaq Composite.

My goal this year is to apply the lessons I learned from the disaster of 2000-02 and increase the margin by which this aggressive portfolio beats the indices.

So here's my annual revision to the Future 50. This year's report includes:

  • Four stocks that are ready to graduate from this list to the more mature 50 Best Stocks in the World portfolio . (They'll join that list when I do my annual revision in September.)
  • Three stocks that drop off the Future 50 list because they no longer have what it takes to become tomorrow's blue chips.
  • Seven new picks that have a chance to be blue chips of the future.

A Shakeout

When I asked readers to nominate stocks for this list in July 1999, I suggested that they keep this in mind: If you were to look at the list in July 2004, you'd say about each entry, "Boy, I wish I'd bought that five years ago, and I'd sure be willing to hold it for another five years."

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