No you don't [need a portfolio]
YES, you do.
I've been doing freelance work for 10 years, almost 5 years fulltime now, and I still don't have a portfolio really. I have sites I can show people and explain what I did, but I could never advertise them as my own work (without facing legal action at least).
I bet you have and that's where your devaluation of portfolios has come from; you do not need a portfolio because you have developed experience and confidence.
This chap needs a portfolio to show capability. I interview and I run in many circles (SEO / backend / graphics / marketing) and manage people to take care of that. The first thing I will ask of a creative bod is a portfolio. Even a graduate has a portfolio, an *employable* person (in or out of work) will have one too.
What, am I expected to be content with someone 'convince' me that they 'can' do a 'great' website and that they 'know' x,y,z? Of course not, it's absurd.
SpicyDuck,
I have two pieces of advice for you. Take a website (example below), identify what works, why they did that, and look at the code. Download the code, images, everything so it's on your harddrive. Learn it, and make it your own; with your own graphics (or modify, or use royalty free graphics), add your own content (text). Obviouslly you can't do this with Amazon.com or a large dynamic website, so you will have to use your initiative to locate a simple website, 3-5 pages that works for you. Google 'template websites', or search for resellers (example below) and look at how they sell a portfolio. The idea is that you DO NOT invent the wheel, start with something someone else has created and make it your own. This is the first step and; it will teach you content awareness (identifying what's good, what's bad -remember to add that to your sell process / CV) and it will develop skills (css, html, graphics) without needing to invent everything.
Secondally, you will benefit by picking a niche that you can develop and that you have natural skill in. Profitable niches, especially in this climate or ones that offer your customer (or employer) the ability to create or save money. Website designer niches that are in less profitable are things like Photoshop, Illustrator etc. Things like SEO, copy writing, e-commerce, and blog-based websites are very big sells at the moment. My next tip then, (and this is a personal opinion), is to develop a little knowledge on SEO. Every employer and every customer can benefit from it, and learning the art of it can be very profitable for you. Best of all, the more skills you develop in step 1 (above) will bolster your SEO capability as the two are linked. Step 2 then, create a Google Analytics account. Become familiar and learn the trade of SEO and copy writing from there. It's a big one, but hey, I'm not concerned with your difficulty learning stuff and this step is optional. For your convenience, Google do host a wealth of information on YouTube (Google University) and you can pick up so much information from there until your head hurts.
But the first and most important step, to recap, is pick a 'nice and simple' website that is effective in it's goal and make it your own.
Perhaps not the answers you were looking for, perhaps not the 'best practice', but this will develop your skills (both technical and content awareness), show capability and make you employable. Don't get intimidated by my second suggestion and concentrate on that first website.
Good luck, let us know how you get along?
Majestic~
NB: On selling yourself and our friend Mickey...
If you are still in the 'amateur' stages then you need to mask that. This is called selling. I am assuming that you are not a wizard so do the next best thing, sell yourself as one cleverly. Our friend Mickey may be a wizard and doesn't need to rely on portfolios but you do. And lastly, do not go and make a website for your friends and family. I'm not being personal, I am being business. Look at the link below and make an example business website.
NB: The website I have given as an example...
If the website below (based on a Wordpress engine) is too much then Google around for a particular sector (lawyers, training, plumbers, etc etc) and find a website that works. Identify what works and create your own website with that code as a starting point.
http://www.studiopress.com/demo/corporate.html