Welcome to week 50 of my stock-picking throwdown with Mr. Market. Let's get right to the numbers:
|
Company
|
Starting Price*
|
Recent Price
|
Total Return
|
|
Akamai
|
$22.23
|
$21.25
|
(4.4%)
|
|
Harris & Harris (Nasdaq: TINY )
|
$6.22
|
$5.90
|
(5.1%)
|
|
IBM
|
$126.97**
|
$117.06
|
(7.8%)
|
|
Oracle
|
$22.64**
|
$22.20
|
(1.9%)
|
|
Taiwan Semiconductor
|
$9.81**
|
$10.32
|
5.2%
|
|
AVERAGE RETURN
|
--
|
--
|
(2.80%)
|
|
S&P 500 SPDR
|
$123.67**
|
$97.66
|
(21.03%)
|
|
DIFFERENCE
|
--
|
--
|
18.23
|
Source: Yahoo! Finance.
*Tracking began on Aug. 7, 2008.
**Adjusted for dividends and other returns of capital.
A great week for Mr. Market was even better for my tech portfolio, which added 38 basis points to an already sizeable lead in this contest. Here's a look at where we started last summer. Every one of these stocks has been a real-money winner for me.
But my returns are lightweight compared some of the recent rally’s biggest winners. A friend on Twitter says she knows someone who loaded up on Ford (NYSE: F ) at around $1 a share. The stock is trading for more nearly $7 as of this writing. Wowsa.
Are these gains sustainable? That's a fair question. Ford this week said it earned $0.69 per share in the second quarter, up from a $3.89-per-share loss in last year's Q2. But all of that and more came from $2.8 billion in "special items." (Ahem.)
Of course, Ford wasn't the only one to put its accountants on the hamster wheel. Bank of America (NYSE: BAC ) and Citigroup (NYSE: C ) touted "profits" built from massive, one-time asset sales. (Ahem.)
But the biggest news of the week was the health-care debate and its potential impact on the federal budget, and thereby the economy. The back-and-forth has been typically partisan and tiring, and in the process has obscured an important truth: The real cost of the bailout is nowhere near $23.7 trillion. (Ahem.)
The week in tech
You'll find an equal amount of hand-wringing among tech investors this morning. Last night, Microsoft (Nasdaq: MSFT ) announced its first-ever year of negative growth as a public company. Pure schadenfreude for haters, in other words.
Wait, there's more! Microsoft's $13.1 billion in fourth-quarter revenue was more than $1 billion short of the Street's average target. What went wrong? Windows. Yes, Windows. Not enough PCs shipped with Vista installed. Consequently, the client business unit -- responsible for shepherding the Windows OS -- suffered a 29% drop in revenue. No division suffered more.
But just as Intel was the foil for Advanced Micro Devices when it reported awful earnings, Apple (Nasdaq: AAPL ) was Microsoft's mirror image. The Mac maker's third-quarter revenue improved 12%, and per-share profit rose 13% on fat iPhone margins.
That was one of this week's few victories in tech earnings. Shares of Amazon.com are down more than 8% after reporting a drop in profits. NetGear (Nasdaq: NTGR ) gave up a year's worth of gains after reporting lower margins and a net loss.
So be it. History says that tech markets are prone to disruption, and tech investors do best when they're patient, as David Gardner has been. He produced a decade of 20% returns in the real-money Rule Breaker portfolio. Tom Gardner's "simpleton portfolio" was also a 10-year winner. With these five tech stocks, I believe I will achieve similar success.
Checkup time!
Now, let's move on to the rest of today's update:
- Kovio, a microelectronics innovator, this week raised $30 million in new funding from Harris & Harris and other venture capitalists. The money should bankroll Kovio's tiny barcode technology, designed to make consumer products more intelligent.
- Analysts predict that Taiwan Semiconductor Manufacturing will reveal market-share gains when it reports second-quarter earnings on July 30, according to Reuters.
There's your checkup. See you back here next week for more tech-stock talk.
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