Welcome to week 112 of my stock-picking throwdown with Mr. Market. Let's get right to the numbers.
|Harris & Harris||$6.22||$4.34||(30.2%)|
|Oracle (Nasdaq: ORCL )||$22.40**||$28.33||26.5%|
|Taiwan Semiconductor (NYSE: TSM )||$9.35**||$10.37||10.9%|
|S&P 500 SPDR||$121.20**||$117.46||(3.1%)|
Source: Yahoo! Finance.
*Tracking began on Aug. 7, 2008.
**Adjusted for dividends and other returns of capital.
This week was good to both Mr. Market and my tech portfolio, as a broad rally brought the Dow once again above 11,000. Is the move justified? Perhaps, but it only matters if you're an indexer. For stock pickers, lush opportunities remain.
Consider Crown Media (Nasdaq: CRWN ) , a special situation where the possibility of a buyout makes the stock look like an easy double. But don't take my word for it; read the in-depth analysis from my Foolish colleague Jim Royal.
Crown isn't the only bargain out there, of course, but with the forthcoming midterm elections and the debates over taxes, spending, and the likelihood of a currency doomsday, investors can hardly be blamed for getting distracted.
As another of my Foolish colleagues, Morgan Housel, points out in ruminating on Warren Buffett's plea for higher taxes: "With Buffett's taxes, or anyone's taxes for that matter, the tragedy of the commons is relevant in the sense that you'd have to be certifiably irrational to voluntarily pay a higher tax bill than you're charged, even when you can, like Buffett, acknowledge how wacky and in need of repair the system is. Given a choice, the sensible thing to do individually is to pay in as little as possible while extracting as many benefits as possible."
Translation: Yes, somebody needs to pay more, and that somebody isn't me. (Hoo boy.)
The week in tech
If you've ever been to Silicon Valley, you know that many of its residents are as allergic to taxes as an asthmatic is to pollen. Too bad. Many techies will soon be paying more in corporate taxes -- not because of policy changes, but because of higher earnings.
On Tuesday, Intel (Nasdaq: INTC ) reported better-than-expected revenue and earnings. Net income, in particular, improved by 58% to $0.52 per share. Surely that's going to result in a fat check for Uncle Sam's wallet.
On Thursday, Google (Nasdaq: GOOG ) said earnings improved by 32% on a 23% rise in revenue. Both figures easily blew away analyst estimates. Even better, mobile advertising is now tracking as a billion-dollar business, good enough to silence skeptics who've long doubted Android's ability to boost The Big G's bottom line.
Finally, Sirius XM Radio (Nasdaq: SIRI ) reported big subscriber gains and a plan to refinance hundreds of millions in debt due in 2013. That's a smart move, and it's reflective of Sirius' improving business fundamentals -- although I'd wait for insiders to act before buying shares.
In short, it was a good week for the tech elite. But don't get too excited. It's not the megastocks but the disruptors that end up as millionaire-makers.
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.
Now let's move on to the rest of today's update:
- Yesterday, Taiwan Semiconductor reported $1.2 billion in unconsolidated sales for September, up just 0.4% from the month before, Reuters reports. A small sell-off suggests that investors were expecting better.
- According to The Wall Street Journal, Oracle is entertaining a bid for data-storage leader EMC (NYSE: EMC ) . I'm not yet ready to offer an opinion on what a deal might mean, but with EMC's $40 billion enterprise value, the database king would be forced to issue shares in order to finance the transaction.
There's your checkup. See you back here next week for more tech-stock talk.
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