These Tech Stocks Will Make Me Rich

Welcome to week 61 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

$20.31

(8.6%)

Harris & Harris

$6.22

$5.07

(18.5%)

IBM

$126.39**

$125.93

(0.4%)

Oracle

$22.58**

$20.74

(8.1%)

Taiwan Semiconductor

$9.81**

$10.05

2.4%

AVERAGE RETURN

--

--

(6.64%)

S&P 500 SPDR

$123.09**

$107.26

(12.86%)

DIFFERENCE

--

--

6.22

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

That's two weeks in a row of losing to Mr. Market. Only this time, my tech portfolio got hammered -- losing more than four percentage points, the stock market equivalent of the 44-7 beating the New York Giants delivered to the Oakland Raiders yesterday.

The loss stings, especially since I was all too recently up more than 15 percentage points in this contest. But I won't cry about it -- unlike the wusses behind the "80 Million Strong" youth movement. They want legislation to stimulate the job market for recent college grads. McDonald's (NYSE: MCD  ) and Starbucks (Nasdaq: SBUX  ) don't qualify for starter jobs anymore, apparently. There's no telling what impact the 80 Million Strong movement will have, but The White House is more open to regulation than ever before.

On Tuesday, Fools will be meeting with the president's Council of Economic Advisers to ask questions and offer feedback on the role a new consumer protection agency might play in regulating banks such as JPMorgan Chase (NYSE: JPM  ) and credit card issuers such as American Express (NYSE: AXP  ) . Click here to tell us what you think we should be asking about.

The week in tech
If Washington, D.C. stole the national spotlight last week, Washington state stole the tech spotlight from Silicon Valley. Amazon.com (Nasdaq: AMZN  ) lowered the price for its Kindle e-book reader to $259 and introduced a $279 international version, presumably to better compete against the Europe-tested iRex.

Competition hasn't typically been a worry for satellite radio, and for the most part, it still isn't. Terrestrial radio is on the decline, and the iPod and iPhone, even with the free Pandora streaming music service, have yet to offer a pure alternative to Sirius XM's (Nasdaq: SIRI  ) programming lineup. So why are executives selling so many shares? And why now, with the stock still trading for less than $1 per share?

Finally, Mr. Softy's Bing search engine fell back to earth after enjoying some initial success in taking market share from Google (Nasdaq: GOOG  ) . Last week, researcher Hitwise found that Bing suffered a 5% decline in market share from August to September.

Sometimes innovative upstarts turn tech's titans into also-rans, stuff for history's scrap heap. Other times, as in Bing's case, innovators face a long road. That's why tech investing is best practiced in a diversified, patient manner. Look at David Gardner. He produced a decade of 20% returns in the real-money Rule Breaker portfolio by sticking with innovators. Tom Gardner's "simpleton portfolio" was also a 10-year winner. With these five tech stocks, I believe that I will achieve similar success.

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

  • Harris & Harris last week priced a secondary offering at what some observers said was a preposterously low $4.75 per share. They have a point, sort of. Harris & Harris had been trading near $6 a share at the time of the news. Why sell low? The trouble is that no underwriter would agree to price a secondary at a 40% premium to Harris & Harris' last stated net asset value (NAV) of $4.27 per share. At $4.75 per share, Harris & Harris gets needed capital at what seems to be a modest premium to NAV, just as the IPO and private equity market is showing signs of life.
  • IBM needs to defend itself against -- get this -- antitrust inquiries made by the Feds last week. Better get yourself a good lawyer, Big Blue.

There's your checkup. See you back here on Friday for more tech stock talk.

Get your clicks with more techie Foolishness:

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

Fool contributor Tim Beyers had stock and options positions in Google and 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. The Motley Fool owns shares of Starbucks and is also on Twitter as @TheMotleyFool. Its disclosure policy is tech-tastic.


Read/Post Comments (21) | Recommend This Article (3)

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 October 12, 2009, at 4:13 PM, BigVincent wrote:

    Tim,

    The reason for executive's selling there shares is because it was allocated as a cash bonus for these people steering the company through difficult economic times, and quite possibly the BK that could of happened back in feb.

    There is also rumor that sirus/xm will retire some of these executives to put liberty media executive members in there place.

    I think it was a reasonable time to sell. The stock had alot of upswing and will continue to move upward towards 2010. Selling those shares is a good way to to determine the strength/volatility of the shares. Over all the stock is stabilizing, and will more than likely move upward as the Q3 report is released soon.

    If Mel K isn't selling then there is good optimism to look forward to.

  • Report this Comment On October 12, 2009, at 4:35 PM, SIRIDoom wrote:

    Seeking Alpha is a bios site full of pro SIRI. You will NOT find anything but propiganda at Seeking Alpha. They Censor all SIRI negative comments.

    Get your real information here at the FOOL. They ROCK!!!!

  • Report this Comment On October 12, 2009, at 4:40 PM, dedmunds wrote:

    Get realistist information at Seeking Alpha and Satwaves.com. Only bios site here with lies and bad information about SIRI. They only tell the truth there. This place here at The Motley Fool only bashes SIR!!!

  • Report this Comment On October 12, 2009, at 4:42 PM, SIRIDoom wrote:

    SIRI is a disaster waiting.

    The reason for executive's selling there shares is because Mel K wants a 20 or 30 for 1 rev-split. They know it is going down on the news and they know it will take a beating after the split.

    Take advice from the exec's. Follow the leaders...

  • Report this Comment On October 12, 2009, at 4:44 PM, dedmunds wrote:

    SIRIDoom your so full of crap same old shi!!!

  • Report this Comment On October 12, 2009, at 4:46 PM, SIRIDoom wrote:

    Seeking Alpha is a censorship joke. They get paid for advertising stocks. They censor stock negative comments. They need to be removed from Yahoo,,,

  • Report this Comment On October 12, 2009, at 4:52 PM, SIRIDoom wrote:

    The news on SIRI is still the same. ALL BAD NEWS FOR SIRI. Avoid...

  • Report this Comment On October 12, 2009, at 4:55 PM, dedmunds wrote:

    Whats wrong SIRIDoom can't take not being able to post your lies on Seeking Alpha? I guess your Jonesing again not posting the first bunch of old information here.

  • Report this Comment On October 12, 2009, at 5:14 PM, SIRIDoom wrote:

    DOW almost hit 10K today. SIRI lumbered like a lazy dog.

    SIRI is a retail only junk stock locked out of all the major indexes because of very bad performance. SIRI is at risk of being removed from the NASDAQ for bad performance. A Rev-split is a dark cloud over SIRI. Wow, great stock?

    The 3Q report is expected to be less negative. LOL... Another 2 cent lose with hi customer churn. "Tax Cash for Junkers" is the only thing that saved the customer base. What will save the 4thQ?

    Oh yah, lies you can belive in...

  • Report this Comment On October 12, 2009, at 5:20 PM, JPS007 wrote:

    I'd like to propose that people take a stand and stop visiting Motley Fool articles. they are mostly garbage, and written for the sole purpose of generating traffic to their ads.

    From now on, I will not be adding to MF links....please join me.

  • Report this Comment On October 12, 2009, at 5:28 PM, dedmunds wrote:

    Well put JPS007 SatWaves.com and Seeking Alpha only post the realistick information on SIRI!!!

  • Report this Comment On October 12, 2009, at 5:44 PM, SIRIDoom wrote:

    SIRI employee and paid advertising bloggers are a pain. These same people have been advertising SIRI for 2 years. Always bashing anyone who talks bad about SIRI. Go advertise to yourself on Statewaves and Seeking Alpha. Leave people alone to exchange some true stock information.

  • Report this Comment On October 12, 2009, at 6:10 PM, gettingit wrote:

    Tim, do you think that it would make strategic sense for

    for Apple to buy Sirius?

  • Report this Comment On October 12, 2009, at 6:13 PM, dedmunds wrote:

    Anyone having any dought about SIRI read the last article on seeking Alpha about the Siris SkyDock Apps. Only up for SIRI stock. The future is only bright for Siris Stock!!!

  • Report this Comment On October 12, 2009, at 6:36 PM, HFStern wrote:

    IF MEL DOES NOT SELL STOCK NOR WILL EYE.

  • Report this Comment On October 12, 2009, at 6:38 PM, HFStern wrote:

    REPLACE THE CHAIRMAN OF THE BORED AND LET ARTIE RUN THE BORED OF DIRECTORS.

  • Report this Comment On October 12, 2009, at 8:29 PM, TMFMileHigh wrote:

    BigVincent,

    Certainly the executives are due compensation, and I don't blame them for selling in lieu of cash pay. The problem here is the timing; each sale makes the climb back to $1 more difficult, and Sirius XM needs to reach that plateau sooner rather than later.

    gettingit,

    No, I don't think Apple would do well to buy Sirius XM. The Mac maker already has trouble censoring applications for the iPhone; how would it handle Howard Stern and Sirius' other unfiltered content?

    On other hand, selling to Apple -- a company with billions in the bank -- would allow Sirius to retire oppressive debts, insure its satellites, and lock-in long-term agreements with talent.

    Thanks for the comments, all, and Foolish best,

    Tim (TMFMileHigh and @milehighfool on Twitter)

  • Report this Comment On October 12, 2009, at 9:23 PM, 2point2 wrote:

    Cable/satellite took a generation, 20 years, to get into 90% of homes. XM's handicap is they're in a relatively small % of autos and an even smaller % of handhelds and computers. If they can find an appealing "whole house" price point that includes up to 2 cars, home and phone usage, then they'd be on track to a stock price that could peak easily north of $5. Once they can document subscriber growth it could go significantly higher. Absent that, north of a buck is about the best they could hope for and might have to do a reverse split to get there.

    The good news is the cable pioneer John Malone recognized XM's potential and I think he knows the same thing; XM's future success will only reach it's potential if it finds it's way into some form of the traditional cable TV service business model. I trust his instincts and vision.

  • Report this Comment On October 13, 2009, at 11:50 AM, karaokejb wrote:

    The stock being sold by the excutives is restricted sales. These sales were posted may month ago in a SEC filing. They are required to SELL all the stocks outlined in the filing. The share price is barely affected by the sales of the executive shares. The $1 price has not been made because the financials have only show a single quarter performance upswing. The latest packages that Sirius has to offer makes the balance sheet impossible to compare Q over Q. The overall numbers looked better in Q2 than in Q1, but the underlying data was not consistent. The reorginization of the Sirius business model is appearing to be successful and will prove itself at the 3Q CC. The stigma that has beaten the SP down has now subsided. People who have cut back due to the economy left in the 1st Quarter. The Big three have downsized and are producing at a rate better than Q1 (discounting Cash for clunkers). $1 by Christmas is possible with product offerings or a good 3Q report. $1 in 1Q will be definite with a stable 3Q & $ 4Q showings. With no Debt due in 2010, this company will shine and easily break the $1 barrier. Any early retirement of debt in 2010 will push this stock to over $3.

  • Report this Comment On October 13, 2009, at 12:49 PM, BigVincent wrote:

    Tim,

    How is the climb to $1 that difficult?

    The stock climbed on AVG 800% from .0556 within 6 months, and hit a few peaks at 1100% at the .78 range. Why in your mind do you not feel that it is probable for the stock, in another 6 months to make an additional 800%, this means on AVG the stock would be around $1.20 by march if the stock can continue an upward trend without all the lame media bashing that goes on.

    The wallstreet journal, the street.com, Goldman Sachs, and the Motely Fool have little to nothing positive to say about this company.

    It's outperformed and gone through many obstacles that many other companies would not perform to and infact have filed for BK. Charter Communications was a prime example of that and it bleed 4times the amount of debt that sirius/xm had acquired. The company shows excellent EBITDA, has proven to lower acquisition cost through out the past 2 years, and the most critical of all has lowered operating costs that were making the company hemorrhage. look at this company as a whole. For being in a recession that was declared worse than the great depression still maintains churn under 3% even after the company has raised it's rates.

    I honestly don't think anyone in the media is giving this company a fair assessment.

    Most of these media writers don't follow the sec filings, and don't follow the company on a daily basis, but have an unfair, unbalanced biased opinion by looking at debt structure. 90% of companies on the DOW or NASDAQ have acquired debt to start a company. There are several companie's out there with more debt that float above the $1.00 range. I can name 4 of them how about you.

  • Report this Comment On October 14, 2009, at 4:12 AM, SIRIDoom wrote:

    The following has bee censored 5 times from Seeking Alpha:

    ----Sell

    SIRI is going to 38 cents when the rev-split ratio is announced.

    Censoring negative opinions on stocks is abusive media manipulation and a violation of Free Speech. I suggest everyone refuse to use such web sites. Seeking Alpha should be avoided

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