Last year, I declared that the Smartphone War was over for investors – meaning that the opportunity to make big dollars would shift from investing in mobile devices to other areas in the eco-system. That played out as the stocks of the devices makers not named Apple (AAPL) significantly underperformed: Google (GOOG) -4.2%, Nokia (NOK) -19.7% and Research in Motion (RIMM) -13.9%; whereas component makers like ARM Holdings (ARMH) +140% and network infrastructure companies like Ciena (CIEN) +94% had a phenomenal year.
I believe that this trend will continue and recently introduced QOFAR (Qualcomm (QCOM), Open Table (OPEN), F5 Networks (FFIV), Apple and Riverbed Technologies (RVBD)) as my latest attempt to profit from this idea. The strategy is off to a great start and is up 9.9% vs. 2.8% for the S&P 500. I would love to annualize these gains and call it a year, but we know it won’t be that easy.
A twitter buddy who is following this call asked if I had any other acronyms to offer. There are many other stocks that would work within this strategy. Several were listed in the QOFAR introductory blog. My intent is to hold these five stocks as core holdings and trade around them. Let’s see what the market’s intent is.
The chatter about Qualcomm becoming a significant supplier to Apple in the iPad 2 and iPhone 5 is increasing each day. If this materializes QOFAR has the potential of being a home-run.
Disclosure: At the time of this writing I am long: Qualcomm, Open Table, F5 Networks, Apple and Riverbed. Positions may be sold at any time.