The Engadget Index

We're not really traders here at Engadget, but we decided to indulge our fantasies of Gordon Gekko grandeur and put together a portfolio of tech stocks. To pull this thing together we enlisted a little help from our friends over at Blogging Stocks; we think besides being a barometer for the gadget industry, perhaps the Engadget Index will serve as a look from a different angle into the massive economy of consumer electronics. Read on for more.

What we're doing

We'll provide updates both monthly and quarter as to the progress and performance of the portfolio. Monthly updates will typically take place on the first of each month, while the quarterly updates will take place on or shortly after the beginning of the new quarter, so as to insure all quarterly reports, information, and adjusted prices can be accounted for.

How we're running the Engadget Index

We "purchased" 1 share of stock from fifty technology companies hand-selected by our editors, at prices dated October 2nd, 2006 -- the first effective date of Q4 2006. Our total investment for the fifty stocks is $1475.16. As time presses on we'll make additions and subtractions to our running list of stocks as necessary. We will, of course, notify you guys whenever the portfolio lineup changes.

We will only be tracking publicly listed companies on the major US stock markets: NYSE, Amex, and Nasdaq. Some foreign companies may be tracked, but only those traded publicly in the US (e.g. Deutsche Telekom); we won't be tracking OTC Bulletin Board or Pink Sheets markets, tech mutual funds, or anything of the like.

A brief disclaimer

We have very strict rules about owning stocks at Engadget -- namely that outside mutual funds and the like, Engadget editors who own stock in a particular company are expected to abstain from writing about or making editorial decisions about that company. Those at Engadget who participated in the Engadget Index own no stock in any of the companies selected, and no actual stock transactions have taken place in the creation of the Engadget Index. That is to say, this is an entirely fictional portfolio -- only the numbers are real.

Please note that this is for edification and reference purposes only, and should in no way be construed as investment advice. Engadget and its parent companies take no responsibility for you losing mad cash on some bum deals (e.g. TiVo). You've been warned!

The list

1. AAPL - Apple
   
2. AMD - AMD
   
3. AT - Alltel
   
4. BLS - Bell South
   
5. CAJ - Canon
   
6. CHU - China Unicom
   
7. CREAF - Creative
   
8. CSCO - Cisco
9. DELL - Dell
10. DISH - Echostar (DISH)
11. DT - Deutsche Telekom
12. DTV - DirecTV
13. EK - Eastman Kodak
    
14. ERIC - Ericsson
    
15. FUJIY - FujiFilm
    
16. GRMN - Garmin
    
17. GTW - Gateway
    
18. HIT - Hitachi
    
19. HPQ - HP
    
20. INTC - Intel
    
21. KYO - Kyocera
    
22. LOGI - Logitech
    
23. MC - Matsushita (Panasonic)
    
24. MOT - Motorola
    
25. MSFT - Microsoft
    
26. NAPS - Napster
    
27. NIPNY - NEC
    
28. NOK - Nokia
    
29. NTT - Nippon Telegraph & Telephone
    
30. PALM - Palm
    
31. PHG - Koninklijke Philips Electronics N.V. (Philips)
    
32. RIMM - Research in Motion
33. RNWK - Real Networks
    
34. S - Sprint-Nextel
    
35. SANYY - Sanyo
    
36. SI - Siemens
    
37. SIRI - Sirius
    
38. SKM - SK Telecom
    
39. SNDK - Sandisk
    
40. SNE - Sony
    
41. STX - Seagate
    
42. T - AT&T
    
43. TIVO - TiVo
    
44. TMS - Thomson (RCA)
    
45. TXN - Texas Instruments
    
46. UTSI - UT Starcom
    
47. VG - Vonage
    
48. VOD - Vodafone
    
49. VZ - Verizon
    
50. XMSR - XM

So, did we forget a good gadget stock? It's still the beginning of the quarter and we can shuffle the list for November. Let us know in the comments! Remember, they should be consumer electronics companies or related firms, and be publicly traded on the US markets listed above. (But before you suggest any to us, here's are a few symbols you might think of suggesting which didn't make the cut this time: ADPT, BRCM, BT, CMCSA, COMS, CVC, DSS, EBAY, ELNK, GOOG, IBM, IOM, MU, NVDA, NWS, Q, TMTA, TWX, VOXX, WDC, and YHOO.)

Stay tuned for our first portfolio performance update coming November 1st!

[jep10221 Posted Oct 26th 2006 3:40PM]

You might want to take dell and AT&T out of your portfolio! this coming quarter is not looking good for either of them.

[ryan Posted Oct 26th 2006 3:46PM]

Again, that's not the point! It's not to see how well we can pick stocks, it's to see how well the tech industry is performing. Gateway's stock is under two dollars, but it's still important Gateway is in the index. Don't think of this as a performance portfolio, think of this as a consumer electronics industry barometer.

[(Unverified) Posted Oct 26th 2006 5:52PM]

I tried to reply somewhere else in this thread but I must have messed up somehow as I didn't receive a confirmation email.

Anyway, as mentioned in others' comments, I think Engadget should try to publish a Price Index, like the DJIA (which is what you are doing by buying one share of each constituent), an Equal Weighted Index, and a Capitalization Weighted Index, because each would tell the same story, but from different perspectives. In the case of the Equal Weighted Index, you could agree to reset the weights each quarter.

In only relying on price changes to calculate performance, you would present a Price Return index. It would be interesting to see what the returns would be if Dividends were included as well, to come up with a Total Return.

As far as a benchmark, the S&P 500 Technology Sector Index (http://www.google.com/finance?q=INDEXSP%3A.SPLY) will likely do nicely, although an Industry Group index may be even closer in composition.

Editors: Let me know if based on this rambling you suspect I might be able to assist in some way.

[(Unverified) Posted Nov 4th 2006 10:22AM]

IBM has been kicking ass all over my portfolio lately, with much promise to continue doing so. Also Quantum (DSS) just bought ADIC, one of the biggest backup systems manufacturers I know of, which may just save them from being the laughing stock of the storage industry. I own Verizon (VZ), which has been boring outside of it's healthy dividend. Freescale (FSL) is performing much better. I'm also curious why you'd pass on NVidia, they would've doubled my money by now if I had bought them last October.

[(Unverified) Posted Oct 26th 2006 4:37PM]

GOOG Google is missing. :)

[(Unverified) Posted Oct 26th 2006 4:31PM]

You should make a Motley Fool CAPS profile, so you can actually track these.

[(Unverified) Posted Oct 26th 2006 4:39PM]

GOOG , I know its expensive but its the best stock on the street

[(Unverified) Posted Oct 26th 2006 4:41PM]

What about IRBT?

[(Unverified) Posted Oct 26th 2006 7:27PM]

great idea guys! but have you considered, instead of buying one of each stock, buying a set dollar amount of each stock (say $100)?

yes, you'll have to deal with fracional shares, but that way stocks with a larger stock price won't have an overly large influence on the index. instead, each stock will have equal weight which, i'm going to guess, is more towards what you're aiming for with this endeavor.

remember, b/c of stock splits and other things of this ilk, companies with equal market values might have dramatically different stock prices. so stock price alone isn't a good indicator of company worth or health.

[Alexandre Posted Oct 26th 2006 5:46PM]

engadget, the coolest idea ever. but you guys shouldn't do this index this way. it should have weights for each stock. Simply stockpicking is too simple. just my two cents, but great work

[Alexandre Posted Oct 26th 2006 5:47PM]

maybe hire some analysts lol

[(Unverified) Posted Oct 26th 2006 5:49PM]

Maybe you should take short positions as well on consumer electronics companies that seem to be struggling with their products. GTW, for example might be a short candidate.

[(Unverified) Posted Oct 26th 2006 11:54PM]

I'd add ADBE onto that list... and take off Napster... Adobe will do amazing things with Macromedia

[(Unverified) Posted Oct 27th 2006 7:14AM]

is HTC on the stock exchange? seems like they're EVERYwhere else these days (and looking good)

[(Unverified) Posted Oct 27th 2006 9:54AM]

I LOVE IT!!!

[(Unverified) Posted Oct 27th 2006 10:15AM]

You forgot Nvidia. As the leader in 3D graphic cards (basically a monopoly with ATI gone) and soon to be processor manufacturer I think they deserve a spot

[Jf Posted Oct 27th 2006 1:07PM]

What are you going to do when BLS goes away in a couple weeks? Get a new stock? Also, please pay attention to Dimitri (from the first page) I quote him here for simplicity.

If you are attempting to see how well you do, in some thoretical stock-picking game, I would suggest that you use some other sort of weighting. By doing it the way that you are doing it, if AAPL (70B market cap, share price 82) goes up 10%, your index goes up far more than if MSFT goes up 10% (280B market cap, share price 26). You may have wished to put greater emphasis on AAPL, but you should do that by buying varied numbers of shares, NOT by relying on the stock price.

[(Unverified) Posted Oct 28th 2006 6:08PM]

Why doesn't AKAM make the list?

[(Unverified) Posted Nov 6th 2006 6:07PM]

Autodesk (ADSK)

[(Unverified) Posted Nov 10th 2006 11:05PM]

what whappened to this ??? no news yet ??? was supposed to be updated november 1st

[doughboy04690 Posted Dec 13th 2006 11:18PM]

NVDA (Nvidia) was looking very good before. I have not been watching it as closely as before.

[(Unverified) Posted Dec 18th 2006 10:34AM]

try..

[(Unverified) Posted Jan 4th 2007 10:28AM]

Whatever happened to this? I can't find any follow up articles.