These Tech Stocks Will Make Me Rich

Welcome to week 47 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

$19.44

(12.6%)

Harris & Harris (Nasdaq: TINY  )

$6.22

$5.72

(8%)

IBM

$126.97**

$101.73

(19.9%)

Oracle

$22.69**

$21.04

(7.3%)

Taiwan Semiconductor

$10.34

$9.37

(9.4%)

AVERAGE RETURN

--

--

(11.44%)

S&P 500 SPDR

$123.67**

$89.81

(27.38%)

DIFFERENCE

--

--

15.94

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

A bad week hit Mr. Market much harder than it did my tech portfolio, adding 162 basis points to my lead in this contest.

What little economic data we saw last week wasn't pleasing. The U.S. Labor Department said that 467,000 workers lost their jobs in June -- 100,000 more than economists had predicted, and almost 150,000 more than May's casualty rolls, USA TODAY reported. Recent cutters include Gannett (NYSE: GCI  ) and MySpace, which seems to be slouching toward irrelevance.

Layoff news hurt stocks. The S&P 500 fell more than 2% Thursday on concerns that the economy isn't recovering as fast as it should, or as the Obama administration had hoped. Stocks opened down again today after Vice President Joe Biden admitted in a Sunday interview on ABC's This Week that the administration hadn't fully anticipated the depth of the economic mess we're in. "We misread how bad the economy was, but we are now only about 120 days into the recovery package," Biden said.

These and other signs of economic Armageddon overshadowed the very good news that convicted fraudster Bernard Madoff on Monday was sentenced to 150 years in The Big House -- a de facto death penalty for the 71-year-old Madoff. Not enough investors cared. They'd apparently rather cash in and (perhaps) reenter when the economy improves.

The week in tech
Like the broader economy, tech had more than its share of sourpuss towel-throwers last week. Microsoft (Nasdaq: MSFT  ) is reportedly shopping Razorfish, the digital ad agency it acquired when it spent $6.6 billion for aQuantive last year. Yahoo! (Nasdaq: YHOO  ) , meanwhile, is preparing to shutter Maven Networks, which it also acquired last year.

Amazon.com (Nasdaq: AMZN  ) , for its part, has given up on North Carolina. The e-tailer last week booted all affiliates who legally reside there, preventing that state from forcing Amazon to add sales tax to purchases made by residents there.

But not everyone is throwing in the towel. I'm holding my Apple shares, and Sirius XM (Nasdaq: SIRI  ) won't give up on CEO Mel Karmazin, choosing instead to extend his contract to 2012 and bump his salary by 20%. The onetime satellite radio superstar is betting that Karmazin has what it takes to deliver for shareholders over the very long term.

That's appropriate. History says that 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'll achieve similar success.

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

  • Harris & Harris surged 12.8% during the week on little news. Perhaps a thawing IPO market is helping? Shares of LogMeIn (Nasdaq: LOGM  ) opened at $20 per share on Wednesday, well above the $16 price target that underwriters had set. Facebook is also primping itself for the bankers.
  • The Department of Justice has asked for additional time to review Oracle's proposed acquisition of Sun Microsystems. Its sticking point may be Java, a mostly open-source platform and programming language that the DOJ could be loath to see Oracle control.

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

Get your clicks with more techie Foolishness:

Akamai and Harris & Harris are Motley Fool Rule Breakers recommendations. Amazon and Apple are Motley Fool Stock Advisor selections. Microsoft is a Motley Fool Inside Value pick. Try any of our Foolish newsletter services free for 30 days.

Fool contributor Tim Beyers had stock and options positions in Apple and stock positions in 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.

The Motley Fool is also on Twitter as @TheMotleyFool. Its disclosure policy is tech-tastic.


Read/Post Comments (5) | Recommend This Article (22)

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 July 06, 2009, at 3:40 PM, DiscoFinance wrote:

    New movie is out that tells the whole story of Sirius XM. Good flick!! Movie is: Stock Shock (Amazon has it)

  • Report this Comment On July 06, 2009, at 4:06 PM, JPS007 wrote:

    Another Example of MF scaring shareholders into thinking that the return on Sirius XM is only in the "Very" long term. What garbage. If you invested earlier this year, you make as much as 8X your investment. On top of that, the near term outlook is positive, with analysts upgrading with much higher stock price predictions.

    More garbage from MF.

  • Report this Comment On July 06, 2009, at 8:29 PM, guru111melbourne wrote:

    I don't get it...you lost money, i stay in cash i outperformed the market 27.38 percent does that mean anything...YAY i turned 1000 dollars into ~890 dollars...not saying i could do better just saying why the article...didn't really see any news, does madoff being convicted add jobs and spending or just make people feel better about something that doesn't effect them anymore.

  • Report this Comment On July 07, 2009, at 8:47 AM, BullishBroker74 wrote:

    By Brandon Matthews

    Traditional forms of media including television, radio and print are threatened by the success of Sirius XM Radio (SIRI). There is absolutely no doubt in my mind that the organizations behind traditional forms of media have united on a single front to denigrate the Satellite Radio provider at any and all costs. I know this first hand as most of the negative comments left on Satwaves.com can be traced back to everything from terrestrial radio station operators to the National Association of Broadcasters. These traditional media conglomerates control everything most people see and hear. Consider if you will the number 1 hit by the Black Eyed Peas in which the words “Satellite Radio” have been bleeped out by terrestrial radio stations from coast to coast.

    In the years since Howard Stern first joined Sirius, traditional media has made a point of downplaying Howard Stern's relevance. Just last October, the Los Angeles Times published this article which made the claim that Howard Stern was no longer relevant, and that his listeners had dwindled to a fraction of the number that once tuned in. The Los Angeles Times happens to be owned by Tribune; “America’s largest employee-owned media company, operating businesses in publishing, interactive and broadcasting.” The same article was syndicated and republished on an almost daily basis for several weeks that followed, assuring that the story would be told in every major U.S. market and maintain a top ranked listing in google news search results.

    That is why I could not help but laugh hysterically at the newest media attempts to control the American public’s view of Sirius XM Radio through new articles that claim Howard Stern will leave Sirius XM nearly two years from now. These articles now make the claim that Howard Stern is so important and popular, that Sirius XM’s survival hinges on whether or not Howard decides to stay with Sirius XM when his contract comes up for renewal in 2011! Unfortunately, some people seem to be buying into this manipulation and fear-mongering. The reach of these media outlets is unlimited in scope.

    As an example, on the eve of Sirius XM’s announcement that its iPhone application had reached a million downloads, a story was written suggesting that Sirius XM stock would be a good short sale candidate by a known writer who has denigrated Sirius for years. I recall writing that it seemed like a signal was being sent on the Satwaves forums the moment I read it. As trading progressed the following day it looked as if Sirius XM stock would rise precipitously on the iPhone application news. CNBC even picked up the story, but if you follow Sirius XM you knew what was coming next.

    It was then reported that the app, despite having over a million downloads, had a low rating based on the absence of The Howard Stern Show. The very same show that the media has been proclaiming to be irrelevant. The stock ended the day's session flat as a result. Out of nearly 19 million subscribers and out of 1 million iPhone app downloads, the app was given a low rating by a mere 38,000 people. It does not take a rocket scientist to figure out that anyone can bash the application, whether or not they even own an Apple device. I rated the application 5 stars, and I have no iPod nor iPhone. I simply signed up using my AOL account. It can hardly be deemed a reliable source of consumer sentiment compared to the fact that it remains the number 1 downloaded music application.

    As for Howard Stern, terrestrial radio is already on life support. Clear Channel is knocking on bankruptcy’s door. When it comes to radio companies, there is only one that is growing. There is only one that can offer Howard the freedom to do his show and produce new shows without fear of retribution from the FCC. By the year 2011, it is probable that no radio company in existence would be able to afford Howard Stern while offering him a minuscule percentage of his current national audience. Only one radio company can offer The Howard Stern Show a potential global audience in the years to come. That radio company is Sirius XM Radio.

    As for the media manipulation: People should make a stand. If you’d like to be told what to read and hear only that which is selected for you, you might want to consider a move to North Korea. Turn off your am/fm radios. Pick up a Satellite Radio and subscription. Send a message to traditional media that they cannot control what you see and what you hear. I have and in this lies true freedom.

    Position: Long SIRI

  • Report this Comment On July 08, 2009, at 4:46 AM, MrGrape wrote:

    TSMC(Taiwan Semiconductor) has been having big issues with their 40nm process and from what I hear they are getting sub 30% yields. Nvidia might have to go somewhere else for their upcoming gtx300 chips. I'd stay away from them until this 40nm business blows over.

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