My Tech Portfolio Will Crush the Market

Welcome to week 3 of my stock-picking throwdown with Mr. Market. Let's get right to the numbers:

Company

Starting Price

Recent Price

Total Return

Akamai (Nasdaq: AKAM  )

$22.23

$22.59

1.6%

Harris & Harris (Nasdaq: TINY  )

$6.22

$7.32

17.7%

IBM (NYSE: IBM  )

$129.05

$122.99

(4.7%)

Oracle (Nasdaq: ORCL  )

$22.75

$22.30

(1.9%)

Taiwan Semiconductor (NYSE: TSM  )

$10.34

$10.20

(1.4%)

AVERAGE RETURN

--

--

2.26%

S&P 500 SPDR (AMEX: SPY  )

$126.73

$127.80

0.84%

DIFFERENCE

--

--

1.42%

Source: Yahoo! Finance

So, I'm still winning. But I'd be winning by an even wider margin if this contest had been started before the ex-dividend date for Taiwan Semiconductor. A big payout and return of capital this week combined to add more than 20 shares of the stock to our real-money portfolio.

Still, durable gains are what matter -- like when David Gardner produced a decade of 20% returns by buying and holding the likes of Amazon and eBay in the real-money Rule Breaker portfolio, or when Tom Gardner selected a "simpleton portfolio" to hold for a decade, with market-crushing results. I think these five tech stocks will produce plenty of durable gains. (They'd better. Combined, Akamai, Harris & Harris, IBM, Oracle, and Taiwan Semiconductor account for more than 25% of our portfolio's current value.)

This week's checkup
If there's one thing I've learned in a decade of investing, it's that those who quest for long-term returns do best when they closely watch the companies they commit capital to. It's with that spirit in mind that we check in weekly with my top techies.This week's update:

  • Days after Harris & Harris issued new stock options grants, insiders went on a shopping spree, 11 in all. Most of the buying occurred between $7.00 and $7.50 a share.
  • Oracle disclosed the pay package for CEO Larry Ellison in its latest proxy filing. Ellison was granted 7 million stock options at an average exercise price of $20.49 a share. His base salary stayed at $1 million per year, yet his other cash compensation rose from $8.4 million in fiscal 2007 to $10.8 million for fiscal 2008. I don't mind Ellison making a mint so long as he (a) pays his employees well and (b) makes money for me as a shareholder. I don't know much about (a), but I'm very happy with (b).

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

Get your clicks with related Foolishness:

Amazon and eBay are Stock Advisor selections. Akamai and Harris & Harris are Rule Breakers recommendations. Try either of these market-beating services free for 30 days. There's no obligation to subscribe.

Fool contributor Tim Beyers, who is ranked 18,908 out of more than 114,000 participants in CAPS, also writes for Rule Breakers.

Tim owned shares of Akamai, Harris & Harris, IBM, Oracle, and Taiwan Semiconductor at the time of publication. The Motley Fool owns shares of S&P 500 Depository Receipts and has a tech-tastic disclosure policy.


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  • Report this Comment On August 24, 2008, at 3:42 PM, nrublim wrote:

    Hi Tim,

    I agree in general, but Harris and Harris was recommended on the Rule Breakers Portfolio, and I bought in then, when it was around $10.00. Obviously you waited to get in until after it lost 40% of it's value, but if you had 'broken the rules,' your portfolio would only be crushing your profit. I still think H&H is a good play, and will do great once the IPO environment improves, but for those of us who are sitting with it at a loss your trumpeting is a bit tinny.

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