These Tech Stocks Will Make Me Rich

Welcome to week 85 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

$31.41

41.3%

Harris & Harris

$6.22

$4.70

(24.4%)

IBM

$125.26**

$128.25

2.4%

Oracle (Nasdaq: ORCL  )

$22.54**

$25.46

12.9%

Taiwan Semiconductor

$9.81**

$10.60

8.1%

AVERAGE RETURN

--

--

8.06%

S&P 500 SPDR

$122.43**

$117.80

(3.78%)

DIFFERENCE

--

--

11.84

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

Like the market, this is a range-bound contest. I win one week; Mr. Market wins the next, yet my lead remains in the double-digits. This past week, the index took me for 45 basis points.

That's to be expected; tech is resilient but imperfect when it comes to powering transformative business ideas. Consider newspapers. For as much enthusiasm as there is for the iPad and the varying modes of digital delivery, fresh evidence shows that 2009 was one of the worst years in newspaper history. Overall ad revenue fell nearly 29%. Digital ad spending declined for the second straight year, down 11.8%, according to the Newspaper Association of America.

Even so, there's plenty of good news for Mr. Market to cheer. Oil prices have gone as high as $86 a barrel in recent days, giving a lift to energy stocks such as ExxonMobil (NYSE: XOM  ) and Total S.A. Even better: The year's biggest public offering -- worth $1.32 billion -- was an oil stock, Athabasca Oil Sands.

But you didn't need to be in the oil business to do well last week. Both CarMax and Dollar General crushed Wall Street's estimates in reporting earnings results, and at the Fool, we started we a can't-lose, Uncle-Sam-will-bail-us-out-if-we-blow-it mortgage investment business worth $1.25 trillion.

Free money! Woo hoo!

Except of course it wasn't free. It wasn't even real. Our annual April Fool's joke underscored the absurdity of the financial system by illustrating how easily it can be gamed. Read all about our shenanigans here.

The week in tech
From fake news to news that Fools probably wish was fake: Verizon (NYSE: VZ  ) has instituted a fire sale on Palm's (Nasdaq: PALM  ) signature smartphones, the Pre ($50) and the Pixi ($30). At release, Sprint Nextel (NYSE: S  ) sold the Pre for $199.

I'd love to say this move is surprising, but it isn't. Last month, Palm executives copped to limited sell-through of the company's smartphones as projected revenue for next quarter fell 50% sequentially. As a result, a majority of Fools polled believe Palm is now among the stock market's walking dead.

Moving from undead to brain dead, Google (Nasdaq: GOOG  ) last week began to suffer the consequences of moving Chinese search traffic to an unfiltered engine located in Hong Kong.

What's interesting -- and perhaps a little terrifying -- is that Google couldn't understand how the Great Chinese Firewall was filtering some results. Initial confusion turned darkly hilarious when one of The Big G's spokespeople said that China must have made changes in how it dealt with results from google.com.hk.

(Sigh.)

As my Foolish colleague Anders Bylund wrote in reporting the admission, "In other shocking news, kittens are cute and Iraq needs help." C'mon, Google. You can do better than this.

Finally, on Saturday, Apple (Nasdaq: AAPL  ) introduced the iPad. In a Monday press release, the Mac maker said it had sold more than 300,000 of the devices on day one.

Can the Mac maker create a sustained rebellion via the iPad? That's a tougher call, but I'm among those who had hoped for a more groundbreaking device, and for good reason. History shows that owning a diversified portfolio of disruptors can create massive amounts of wealth.

Look at David Gardner. He produced a decade of 20% returns in the real-money Rule Breaker portfolio by betting on a collection of innovators, and then holding them 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:

  • Oracle CEO Larry Ellison was the nation's top-paid executive during 2009. The New York Times reports that Ellison made $85 million in total compensation last year, mostly from stock options. I've no issue with this; Ellison still owns a huge chunk of Oracle via direct holdings, and for years his team has been delivering for shareholders.

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

Get your clicks with more techie Foolishness:

Akamai, Google, and Harris & Harris are Motley Fool Rule Breakers recommendations. Apple is a Motley Fool Stock Advisor selection. CarMax and Sprint Nextel are Motley Fool Inside Value picks. Total S.A. is a Motley Fool Income Investor recommendation. 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 had stock and options positions in Apple and stock positions in 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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  • Report this Comment On April 06, 2010, at 9:24 PM, gwhitebeard wrote:

    I can't understand what the issue is with "Chinese Firewalls" and Google results! Why doesn't Google just use a proprietary encryption alogrithm combined with encapsulation and re-translate responses using a cookie in the browser? Seems pretty straighforwards. Then nobody will "PEEK".

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