Welcome to week 45 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
|
$20.53
|
(7.6%)
|
|
Harris & Harris
|
$6.22
|
$5.34
|
(14.1%)
|
|
IBM (NYSE: IBM)
|
$126.97**
|
$105.89
|
(16.6%)
|
|
Oracle (Nasdaq: ORCL)
|
$22.69**
|
$20.66
|
(8.9%)
|
|
Taiwan Semiconductor
|
$10.34
|
$9.23
|
(10.7%)
|
|
AVERAGE RETURN
|
--
|
--
|
(11.58%)
|
|
S&P 500 SPDR
|
$123.67**
|
$92.04
|
(25.58%)
|
|
DIFFERENCE
|
--
|
--
|
14
|
Source: Yahoo! Finance.
* Tracking began on Aug. 7, 2008.
** Adjusted for dividends and other returns of capital.
My double-digit lead over Mr. Market narrowed some last week as tech stocks took the bigger beating.
Even so, broad skepticism reigns -- and for good reason. Consider the housing market. The Federal Housing Authority is taking on as much risk as ever thanks to loopholes that allow buyers to get into new homes from D.R. Horton (NYSE: DHI), Centex (NYSE: CTX), and others for 0% down.
Meanwhile, some banks are slowly returning bailout funds, but there's likely still about $150 billion still to be spent on varying initiatives. And almost none of that money will go toward cleaning up what Charlie Munger sees as the biggest issue with the financial system: credit default swaps.
More troubling is how the World Bank sees the economic crisis continuing. Earlier today, the lender said the global economy would shrink 2.9% during 2009. Even developing economies are expected to decline by 1.6%. China and India are the notable exceptions.
The week in tech
There aren't many exceptions in the tech realm, although Amazon.com (Nasdaq: AMZN) arguably leads the list of winners. CEO Jeff Bezos last week said that his company planned to divide its Kindle business: one business unit for the e-reader itself, and another for its e-bookstore.
Investing to beat rivals won't be easy: A Mac tablet has potential appeal to device divas, and PC-based alternatives are also a possibility. Amazon also has plenty of competition in e-book sales.
Still, investing now, while Amazon is a brand leader and capital is cheap, looks very smart. Missed opportunities are all too common in tech.
Witness MySpace. In May, the one-time social-media superstar lagged Facebook in overall traffic for the first time, researcher comScore reports. Collapses like these are why Munger's partner, Warren Buffett, won't buy tech.
Looking at Best Buy (NYSE: BBY), it's hard to blame him. The electronics retailer last week reported a 14.5% drop in net income and a 6.2% year-over-year decline in same-store sales. But its bottom-line number beat expectations thanks to cost controls, Dow Jones reported.
Will it recover over the long haul? I think so. History says to bet on tech over very long periods, as Fool co-Founder David Gardner has. 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. I believe that, with these five tech stocks, I will achieve similar success.
Checkup time!
Now, let's move on to the rest of today's update:
There's your checkup. See you back here next week for more tech stock talk.
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