Welcome to week 79 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
|
$25.89
|
16.5%
|
|
Harris & Harris
|
$6.22
|
$4.59
|
(26.2%)
|
|
IBM
|
$125.26**
|
$127.19
|
1.5%
|
|
Oracle
|
$22.54**
|
$24.32
|
7.9%
|
|
Taiwan Semiconductor
|
$9.81**
|
$10.02
|
2.1%
|
|
AVERAGE RETURN
|
--
|
--
|
0.36%
|
|
S&P 500 SPDR
|
$122.43**
|
$111.14
|
(9.22%)
|
|
DIFFERENCE
|
--
|
--
|
9.58
|
Source: Yahoo! Finance.
*Tracking began on Aug. 7, 2008.
**Adjusted for dividends and other returns of capital.
Take that, Mr. Market! A strong week for my tech portfolio brought my average return back into positive territory and widened my lead in this contest.
Are the gains sustainable? I think so, if only because three of my five techies derive large portions of revenue abroad, offering protection in the event large-scale federal deficits torpedo the U.S. dollar and the stocks of American staples such as Target and Whole Foods Market.
On the other hand, you never know when you'll be invested in a business whose customer service leads to a PR disaster. Southwest Airlines (NYSE: LUV ) shareholders know the feeling all too well. Last week, comedian and writer Kevin Smith got booted from a flight; initial reports, later rebutted by the airline, said he was bumped for apparently being (ahem) too large to fly safely in one seat. Hoo boy.
The week in tech
PR disasters aren't exactly alien to tech, either. Remember last year when The Wall Street Journal broke the story of how Apple (Nasdaq: AAPL ) CEO Steve Jobs had received a liver transplant? That disclosure drama lasted for weeks.
Google (Nasdaq: GOOG ) isn't suffering as badly with privacy concerns over its new Buzz social network, but the story isn't over, either. The Electronic Privacy Information Center has filed a complaint with the Federal Trade Commission, and Websense found that spammers took all of two days to figure out how to use Buzz to spread their particular brand of digital hucksterism.
Cisco (Nasdaq: CSCO ) also expressed concerns ... with Hewlett-Packard (NYSE: HPQ ) . The networker last week ended its long-standing partnership agreement with HP in order to compete for deals. Cisco Senior Vice President Keith Goodwin said in a webcast that the "evolving role of the network" was partly to blame for the dissolution. So was Cisco's decision to enter the server business, I'll wager.
In better news, Sirius XM Radio (Nasdaq: SIRI ) passed the long-anticipated $1 per share threshold. Which way will the shares head next? The overwhelming majority of Fools polled say that Sirius will rise to $1.50 rather than fall back to $0.75.
Rackspace Hosting (Nasdaq: RAX ) is also rising now. The website, applications, and data hosting company added 10,000 new cloud computing customers in the fourth quarter as returns on capital improved noticeably. Quarterly revenue and earnings also beat analyst estimates, Reuters reports.
I like Rackspace for the long term. History shows that a portfolio of disruptors can create massive amounts of wealth, especially when operating inside a diversified portfolio.
Look at 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. 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:
- Billionaire investor George Soros dumped his fund's position in Akamai last week. Soros had owned 113,000 shares of the Web content delivery king, website GuruFocus.com reports.
- According to Reuters, Oracle chief executive Larry Ellison said in a Saturday press conference that he expected his recently acquired Sun Microsystems business to be "profitable right away." Right away? I'll be the first to clap if this proves true, but it smacks of undue optimism.
There's your checkup. See you back here next week for more tech stock talk.
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