These Tech Stocks Will Make Me Rich

Welcome to week 115 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 $53.63 141.2%
Harris & Harris $6.22 $4.50 (27.7%)
IBM $124.01** $146.79 18.4%
Oracle (Nasdaq: ORCL  ) $22.40** $29.47 31.6%
Taiwan Semiconductor $9.35** $11.26 20.4%
AVERAGE RETURN -- -- 36.78%
S&P 500 SPDR $121.20** $122.26 0.87%
DIFFERENCE -- -- 35.91

Source: Yahoo! Finance.
*Tracking began on Aug. 7, 2008.
**Adjusted for dividends and other returns of capital.

Can I get a round of applause for Mr. Market? After endless months in the red, his returns are finally -- though marginally -- in the black. Congratulations, sir.

Not that indexers should get cocky. Here at the Fool, we believe in stock picking, and this week introduced a new collection of portfolios under the banner "Rising Stars." Fools whom I call friends and colleagues are managing real-money portfolios with the long-term goal of crushing the market even more than I am now:

  • Alyce Lomax, one of our top retail writers and analysts, is betting on corporate do-gooders such as footwear and apparel retailer Timberland (NYSE: TBL  ) .
  • Eric Bleeker, who edits this column when he isn't writing about tech, may very well produce a portfolio like this one. First among his picks: Cirrus Logic (Nasdaq: CRUS  ) , a maker of chips for audio devices and the energy sector.
  • Sean Sun, a colleague of mine at Motley Fool Rule Breakers, and Ilan Moscovitz are creating a portfolio of international growth stocks. China Yida (Nasdaq: CNYD  ) , which oversees some of that country's top tourist attractions, is their first pick. It's already up by 22% as of this writing.
  • And longtime Fool Rex Moore is using sharp stock screening to build a balanced portfolio. For those who don't know, Rex was responsible for the market-beating Modified Foolish 8 small-cap screen that was a recurring feature in the early issues of Motley Fool Hidden Gems

I'm confident that each of these Fools will do well with their picks. But I'm also sure there will be bumps along the way to collecting gains. Why? All signs point to a worsening of the mortgage mess before it gets better.

Not that you'd know it from most of the reporting out there. Blaming homeowners for overborrowing distracts from the problematic truth that big banks don't know enough about what they hold.

The week in tech
None of the biggest and best in tech faces the same problem. If anything, they're blessed with too much cash and too many resources. This week, Microsoft (Nasdaq: MSFT  ) showed us what's possible when you put some of that moolah to work.

The company's new Kinect system for the Xbox 360 uses a camera and motion sensors to create a lifelike avatar for immersive gaming without a controller. It's a breakthrough that, in many ways, appears to leapfrog Nintendo's motion-sensing Wii controllers by an order of magnitude. Mr. Softy predicts that it will sell 5 million of the $150 add-ons by Christmas, media reports say.

Despite the good news, Microsoft shares have barely budged this week, up less than 1%. That's the sort of middling performance that's sure to make MannKind (Nasdaq: MNKD  ) shareholders envious. That stock fell by as much as 18% on Thursday, after previously unknown details of a lawsuit brought by the company's former regulatory-affairs director, John Arditi, were made public. Arditi charges company officials with "scientific misconduct" in the testing of its inhaled-insulin treatment in trials conducted in Bulgaria and Russia.

Company officials released a statement in response. In it, officials say Arditi was dismissed for reasons unrelated to his allegations and that an internal investigation affirmed MannKind's procedures as sound and free of deception.

Should Fools treat the fall as a buying opportunity? Perhaps. It is, after all, disruptors such as MannKind that have the best odds of becoming millionaire-maker stocks.

Look at David Gardner. He produced a decade of 20% returns in the real-money Rule Breaker portfolio by betting on a collection of innovators and then holding them for the long term. Tom Gardner's "simpleton portfolio" was also a 10-year winner. I believe that with my tech portfolio, I will achieve similar success.

Checkup time!
Now let's move on to the rest of today's update:

  • Oracle and Hewlett-Packard (NYSE: HPQ  ) are after each other once more. The database king plans to subpoena new HP chief executive Leo Apotheker in its legal battle with his former employer, SAP. HP has no plans to cooperate. SAP has offered $120 million to settle part of the lawsuit, but for now the trial continues. Expect this to get ugly, Fools.

There's your checkup. See you back here next week for more tech-stock talk.

Get your clicks with more techie Foolishness:

Nintendo and Timberland are Motley Fool Stock Advisor selections. Akamai is a Motley Fool Rule Breakers recommendation. Microsoft is a Motley Fool Inside Value pick. Motley Fool Options has recommended subscribers open a diagonal call position in Microsoft. Try any of our Foolish newsletter services free for 30 days.

Fool contributor Tim Beyers is a member of the market-beating Rule Breakers stock picking team. He owned shares of Akamai, Harris & Harris, IBM, Oracle, and Taiwan Semiconductor at the time of publication. Check out his portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. You can also get his insights delivered directly to your RSS reader. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool owns shares of IBM, Microsoft, and Oracle and is also on Twitter as @TheMotleyFool. Its disclosure policy is tech-tastic.


Read/Post Comments (2) | Recommend This Article (6)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On November 06, 2010, at 2:36 PM, PacificSunwear wrote:

    Tim,

    You failed to mention your short call from Sept. Down over 40% in less than 2 months. I guess you selectively chose your portfolio at the time of writing.

    PSUN is now close to a two year high.

    Full disclosure Timmy.

  • Report this Comment On November 06, 2010, at 3:19 PM, TMFMileHigh wrote:

    @PacificSunwear.

    Thanks for writing,

    >>You failed to mention your short call from Sept.

    You're referring to this article, which is unrelated to the article you're commenting on:

    http://www.fool.com/investing/general/2010/09/15/these-stock...

    >>Full disclosure Timmy

    Of what? Every call I've ever made in an article? Sounds to me like you're desperately searching for something to complain about.

    Far as real money and CAPS picks goes, the links in the disclosure line of each story I write reveals which stocks I own, and which I've rated. It's always been this way, and will continue to be.

    Foolish best,

    Tim (TMFMileHigh and @milehighfool on Twitter)

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