These Tech Stocks Will Make Me Rich

Welcome to week 77 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

$25.32

13.9%

Harris & Harris

$6.22

$4.05

(34.9%)

IBM

$125.82**

$123.52

(1.8%)

Oracle

$22.54**

$23.55

4.5%

Taiwan Semiconductor (NYSE: TSM  )

$9.81**

$9.56

(2.5%)

AVERAGE RETURN

--

--

(4.16%)

S&P 500 SPDR

$122.43**

$106.66

(12.88%)

DIFFERENCE

--

--

8.72

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

A down-and-up week for Mr. Market was a little more stable for me. I needed it after the previous week's massacre.

But I needn't get too comfortable. Some of the best stocks of the past few years have been battered. Witness Toyota. Once held up as a paragon of quality, the carmaker has seen its reputation marred by recalls and mismanagement. The stock is down 13.5% year to date.

Poor management is everywhere. Just ask anyone watching the boat wreck that Bank of America became at the end of former CEO Ken Lewis' tenure. So confusing was Lewis' overpriced 2008 bid for Merrill Lynch that New York Attorney General Andrew Cuomo is now calling it fraud.

Is he right? My Foolish colleague Morgan Housel has something to say about that. All I know is that the next Ken Lewis is still out there, somewhere. (Hopefully not lurking in tech.)

The week in tech
What do you do when you don't get your way? If you're Amazon.com (Nasdaq: AMZN  ) , you pitch a fit. The e-tailer briefly removed all of Macmillan titles from its virtual shelves when the publisher raised prices on its titles. Those same shelves were then restocked as of last Sunday. Stupid.

Meanwhile, AOL (NYSE: AOL  ) can't seem to get its Seed.com to grow. The Web portal-cum-content creator suffered a 17% decline in overall revenue as access subscriber sales fell 28% in its first quarter since spinning away from Time Warner. There are now fewer than 5 million paying AOL subscribers, well off its all-time high of 30 million.

Finally, pugnacious Dallas Mavericks owner and semi-pro agitator Mark Cuban set his sights on Google (Nasdaq: GOOG  ) last week. Cuban argues that Google's News portal harms newspaper companies such as Gannett (NYSE: GCI  ) by supplanting their brands for its own. My Foolish colleague Rick Munarriz disagrees.

I'm with Rick on this one; links are currency in the digital world and Google provides them for the world's top newspapers, including those owned by would-be digital news rebel News Corp. (Nasdaq: NWS  ) .

History could prove me wrong. Disruption is the rule rather than the exception in tech, and the resulting market volatility can destroy even the sturdiest of tech portfolios. Patience and diversification are the keys to unlocking long-term gains.

Look at Fool co-founder David Gardner. He produced a decade of 20% returns in the real-money Rule Breaker portfolio by betting on a broad portfolio of innovators, and holding for the long-term. Fool co-founder Tom Gardner's "simpleton portfolio" was also a 10-year winner. I believe that, with my tech portfolio, I will achieve similar success.

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

  • As expected, Akamai put up excellent fourth-quarter numbers last week. Revenue improved 12% to $238 million. Normalized net income jumped 21% over last quarter to $0.46 per share. Looking ahead, Akamai added more than 5,000 servers to its global network during the quarter.
  • There's no way to tell exactly what accounts for the sell-off in shares of Taiwan Semiconductor, especially after last month's outstanding performance. Fourth-quarter profit more than doubled. Revenue soared 43%. Shares of the world's largest contract chip maker are nevertheless down almost 5% since the Jan. 28 close.

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

Get your clicks with more techie Foolishness:

Amazon is a Motley Fool Stock Advisor selection. Akamai, Google, and Harris & Harris are Motley Fool Rule Breakers recommendations. Try any of our Foolish newsletter services free for 30 days.

Fool contributor Tim Beyers is a member of the market-beating Rule Breakers stock-picking team. He owned shares of Akamai, Google, 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 Oracle and is also on Twitter as @TheMotleyFool. Its disclosure policy is tech-tastic.


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