Thursday, December 21, 2006

The Innovation Index yielded to year-end profit-taking and news of a slowing U.S. economy, and was down 1% for the week ending December 20, 2006 closing at 74.00 (click on the image to view the Index). The Innovation Index is up 11% for the year, now trailing S & P 500 by 1% and Dow Jones Index by 4%. The Innovation Index is up by 3% over NASDAQ.

For the first time, I am including the Innovation Index summary since January 1, 2001 for reference. Since 2001, The Innovation Index is up 120%, whereas the S & P 500 is up 11%, NASDAQ is up 6%, and Dow Jones Index up 17% (click on the image to view the Index). This is a clear indicator that it pays to stay with the Innovation Index innovators for the long term, and importantly, new innovations take time to create markets, market share growth, and resulting revenue and profit growth. Case in point: Apple Computer (NASDAQ: AAPL) which is up 1,039% since 2001 to lead all the innovators in the index, thanks in large part due to iPod, Apple's best innovation.

The big mover last week was General Electric (NYSE: GE), up 7% in one week, and now up 7% for the year. What a great time to stage a rally. Amazon.com (NASDAQ: AMZN) and Hewlett Packard (NYSE: HPQ) were each up 4% for the week. AMZN is recovering nicely from the year lows, and is now down 16% for the year. HPQ is on a tear this year notching gains of 44% for the year. Research In Motion (NASDAQ: RIMM) made up for the 6% drop the previous week, by gaining back 6% for the week. Microsoft (NASDAQ: MSFT) is up 12% for the year on the back of many innovations announced this year including the recent Vista, Office 2007 and Exchange 2007, handily beating Google (NASDAQ: GOOG) only up 6% for the year, who used acquisitions such as YouTube to spur innovations. GOOG has cooled down as the year winds down. Will MSFT beat GOOG again next year, or will GOOG rebound? Apple Computer (NASDAQ: AAPL) dropped 5% last week, followed by 3% drops each by Google (NASDAQ: GOOG), Southwest Airlines (NYSE: LUV), and eBay (NASDAQ: EBAY) contributing to the fall in the Innovation Index.

Research In Motion (NASDAQ: RIMM), Cisco Systems (NASDAQ: CSCO) and Hewlett Packard (NYSE: HPQ) are the top three performers on the Innovation Index for the year gaining 102%, 57% and 44% respectively. eBay (NASDAQ: EBAY), Intel (NYSE: INTC) and Amazon.com (NASDAQ: AMZN) are the bottom three performers on the Innovation Index for the year losing 29%, 19% and 16% respectively. Dell (NASDAQ: DELL) joined Amazon.com at 16% loss for the year, with another 1% drop last week.

I released story on Southwest Airlines (NYSE: LUV) flying high with innovations last week. The story is included below under references section.

Where will the Innovation Index close for the year? Will there be a Santa rally? My earlier projection that the Innovation Index will be up 15% for the year is going to require a significant rally. I will keep my fingers crossed. We had GE moving up 7% for the week. Are we going to find more rallies such as GE's before the year comes to a close?

About The Innovation Index

The Innovation Index is a compilation of the top 18 Innovators in North America.

The alphabetical list of the top 18 Innovators of The Innovation Index along with their stock ticker symbols are presented below:

3M Company - (NYSE: MMM)
Amazon.com, Inc. - (NASDAQ: AMZN)
Apple Computer, 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)

Selected references:
Leading eBook on Creativity and Innovation in Business
Creativity and Innovation Best Practices
Creativity and Innovation Case Studies
The Innovation Index
Top 50 innovative companies in the world

References:

Southwest Airlines Flying High With Innovations

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