The Innovation Index gallops to 56%, crushes major U.S. indices - Quarterly Report 09-28-07

The Innovation Index had a monster third quarter in 2007. The Innovation Index added 20% during the third quarter, and has now gained 56% for the year. The Innovation Index has already more than quadrupled the 2006 performance, and we still have one more quarter to go. Could this be another banner year for The Innovation Index? The Innovation Index easily crushes the major U.S. indices including the S & P 500, NASDAQ and Dow Jones. S & P 500 added only 2% during the quarter, and is now up 8% for the year; NASDAQ was up 4% during the quarter, and is up to double-digit gains at 12% for the year; the Dow Jones Index also gained 4% during the quarter, and is now up 11% for the year.

The Innovation Index closed at 101.39 on September 28, 2007, up 20% from the closing price of 84.68 on June 29, 2007, and up 56% from the closing price of 65.05 on December 29, 2006.


(click to maximize The Innovation Index Performance)

What caused The Innovation Index to add a spectacular 20% during the last quarter? Four innovators caused the jump, the largest increase coming from Research In Motion Limited - (NASDAQ: RIMM) that went up 38% in one quarter, and is now up 131% for the year. Amazon.com, Inc. - (NASDAQ: AMZN) also rose to dizzying heights by gaining 36% for the quarter, and is now up 136% for the year. Not to be ignored is Apple Inc. - (NASDAQ: AAPL) that gained 26% during the quarter, and is now up 81% for the year. eBay Inc. - (NASDAQ: EBAY) had an impressive run up as well, by notching gains of 21% during the quarter, and growing to 30% gains for the year.

13 of the Top 20 Innovators showed positive gains during the quarter (8 out of the 13 had double-digit gains), only 4 of the Top 20 Innovators showed negative gains, and 3 Innovators were unchanged during the quarter.

The Innovation Index is on a roll!!

Yearly Leaders and Laggards

Who sits on the top of The Innovation Index? Amazon.com, Inc. (NASDAQ: AMZN) gained 36% during the quarter, and leads all innovators with a whopping 136% gains for the year. Research In Motion Limited - (NASDAQ: RIMM) is next up with massive 131% gains for the year. Apple Inc. (NASDAQ: AAPL) is next up with 81% appreciation for the year. There are twelve other innovators with double-digit gains for the year.

Starbucks Corporation (NASDAQ: SBUX) is the significant decliner, down 26% for the year; can Starbucks rally in the last quarter of the year?

About The Innovation Index

The Innovation Index introduced in December 2006 is a weighted stock price index of the top 20 Innovators in North America.

The Innovation Index has returned 119% over the last five years. This assumes an investment in each stock of The Innovation Index (buying each stock). An average of $100 invested in The Innovation Index on December 31, 2001 returned $219 as of December 29, 2006. By comparison, $100 invested in each of S & P 500, NASDAQ and Dow Jones Index returned $124. The Innovation Index beats the S & P 500, NASDAQ and Dow Jones Index by 77% over the last five years.

The Normalized Innovation Index has returned an impressive 174% over the last five years. This assumes equal investment in each stock of The Innovation Index as of December 31, 2001.

Alphabetical list of the top 20 Innovators of The Innovation Index and their stock ticker symbols:

3M Company - (NYSE: MMM)
Amazon.com, Inc. - (NASDAQ: AMZN)
America Movil - (NYSE: AMX)
Apple Inc. - (NASDAQ: AAPL)
Cisco Systems, Inc. - (NASDAQ: CSCO)
Dell Inc. - (NASDAQ: DELL)
eBay Inc. - (NASDAQ: EBAY)
General Electric Co. - (NYSE: GE)
Google Inc. - (NASDAQ: GOOG)
Hewlett-Packard Co. - (NYSE: HPQ)
Intel Corporation - (NYSE: INTC)
International Business Machines Corp. - (NYSE: IBM)
Microsoft Corporation - (NASDAQ: MSFT)
Research In Motion Limited - (NASDAQ: RIMM)
Southwest Airlines Co. - (NYSE: LUV)
Starbucks Corporation - (NASDAQ: SBUX)
Target Corp. - (NYSE: TGT)
The Proctor & Gamble Company - (NYSE: PG)
Wal-Mart Stores, Inc. - (NYSE: WMT)
Yahoo! Inc. - (NASDAQ: YHOO)

The Innovation Index will analyze the positions and standings of the top 20 Innovators at the end of each year. For 2007, there will be no further changes in The Innovation Index.

Disclaimer: I invest in the stocks comprising The Innovation Index.