I am not a professional stock picker, but over the past decade my portfolio has beaten the stock market by a factor of three to one.
Unlike Peter Lynch, who advocated investing in the makers of products you love and who, in my estimation, stands out as one of the greatest of all stock pickers, I did not examine a single financial metric to build my portfolio. Instead, I simply ranked competitors in each industry based on customer love and then bet on the winner.
My portfolio has performed so well because the market undervalues the economic power of customer love. When customers feel loved, they come back for more and refer their friends. This is the economic flywheel that drives sustainable prosperity, and companies built on it generate surprising levels of profitable growth.
To measure customer love, I used the Net Promoter Score (NPS) that I created 20 years ago. It captures how likely a customer is to recommend a product or service to a friend or colleague. I relied on the market to incorporate all financial insights into the current stock price.
My buy-and-hold investing portfolio started with the 11 public NPS leaders profiled in my 2010 book, “The Ultimate Question 2.0“: Amazon AMZN, Meta Platforms (formerly Facebook) FB, Apple AAPL, Costco Wholesale COST, Google parent Alphabet GOOG GOOGL, Southwest Airlines LUV, American Express AXP, JetBlue Airways JBLU, Verizon Communications VZ, T-Mobile US TMUS, NortonLifeLock NLOK and Metro PCS Communications (which merged with T-Mobile in 2013).
In hindsight some of those stocks look like no-brainers, but back when the book was written they were anything but. Amazon had a market cap below eBay’s. T-Mobile was considered by many to be the weakest player in mobile telephony.
