Welcome to week 145 of my stock-picking throwdown with Mr. Market. Let's get right to the numbers.
|Harris & Harris
|IBM (NYSE: IBM )
|Oracle (Nasdaq: ORCL )
|S&P 500 SPDR
Source: Yahoo! Finance.
*Tracking began on Aug. 7, 2008.
**Adjusted for dividends and other returns of capital.
Both my tech portfolio and Mr. Market took a beating last week, when the feds reported worse-than-expected employment data. But of the two of us, it was the SPDR that suffered deeper wounds. The index fell 257 basis points, while, as a group, my five techies declined just 156 basis points. My lead is safe -- for now.
Among the indexes, the small-cap Russell 2000 took the biggest hit with a 3.36% weekly loss, while the others fell about in line with each other. The Dow fell 2.33%, its fifth consecutive weekly decline, while the S&P 500 fell 2.32% and the Nasdaq declined 2.29%, CNBC reports. The big losses lend credence to the fears expressed in the VIX's above-average rating. The VIX is an indexed measure of volatility, generally considered a proxy for measuring fear among investors.
And there's certainly plenty of reason to worry. With the national unemployment rate now at 9.1% rather than the 8.9% that economists had expected, we're faced with renewed questions of whether the government will add yet more stimulus to an economy that's been through the financial equivalent of electric shock therapy.
Interestingly, the uncertainty hasn't done much to dampen enthusiasm for stocks that are loosely related to Washington's budget cycles. Take Central Vermont Public Service (NYSE: CV ) . Shares of the state's largest electric utility surged more than 40% after it agreed to be acquired by Canada's Fortis for $700 million, which includes $230 million in assumed debt.
The week in tech
Acquisitions are still en vogue among the digerati, but it's the IPO market that's making headlines. The latest to dress up for the public-market dance? Groupon, the coupon-buying site whose astounding top-line growth makes Facebook and Twitter look like snails.
But there's also more here than meets the eye. Outsized investments in marketing and staff have led to net losses for Groupon. Winning repeat buyers also hasn't been easy when consumers are turning to social media and location-based services for serendipitous deal recommendations. The company needs its recently introduced Groupon Now! mobile service to exceed expectations.
Pandora Radio isn't under as much pressure, but as the company prepares for an IPO of its own later this month, it's fair to ask whether investors will react with the same enthusiasm they've shown for LinkedIn. The answer seems to be "no."
Only 32% of those asked in a recent poll at Fool.com said they'd purchase Pandora shares. By contrast, 60% said Sirius XM Radio (Nasdaq: SIRI ) is the best play in streamed audio entertainment, while 5% expect Apple (Nasdaq: AAPL ) and Google (Nasdaq: GOOG ) to fight for dominance when it comes to streaming music. Apple introduced its iCloud service today, at the close of its Worldwide Developer Conference.
Another possibility is that we've yet to meet the ultimate winner in streaming music. History says it's men and women toiling in obscurity who tend to give rise to tech paradigm shifts. Their passion and inventiveness go ignored until market reality forces their creations to the forefront, unlocking billions in market value.
These are the Fools David Gardner follows. 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.
Now let's move on to the rest of today's update.
- New data from researcher IDC says that both IBM and Oracle gained share in the $11.9 billion worldwide server market, while Hewlett-Packard (NYSE: HPQ ) , the global leader, gave ground. Second-ranked Big Blue upped its share to 29.2% from 26.9% in last year's Q1, while Oracle improved from 6.4% to 6.5% over the same period. HP lost 30 basis points, falling from 31.8% to 31.5%.
There's your checkup. See you back here over the weekend for more tech-stock talk. In the meantime, don't forget to keep up with my tech portfolio by adding these stocks to your watchlist today: