Welcome to week 132 of my stock-picking throwdown with Mr. Market. Let's get right to the numbers.
|Harris & Harris
|IBM (NYSE: IBM )
|Oracle (Nasdaq: ORCL )
|S&P 500 SPDR
Source: Yahoo! Finance.
*Tracking began on Aug. 7, 2008.
**Adjusted for dividends and other returns of capital.
And the beatings go on. This week, Mr. Market grabbed back another 254 basis points in this three-year contest to see who's better at making money for investors: me, or the index. I'm winning, but I've given back more than 12 percentage points since late December. Such is the nature of investing in volatile tech stocks.
I'm not the only one whose performance has lagged recently. Among the major equity indexes, the tech-heavy Nasdaq has performed worst year-to-date. But for the week, it was the S&P 500's 0.74% loss that led the losers, followed closely by the Dow 30, which fell by 0.72%. The Nasdaq slid by 0.50% while the small-cap Russell 2000 fell by 0.47%, CNBC reports.
As an asset class, small caps continue to do well. The week's top performer, mobile hydraulic systems maker Sauer-Danfoss, is worth just $1.9 billion in market cap as of this writing. Investors bid up the stock more than 33% after the company blew past Wall Street's expectations for fourth-quarter revenue and profit.
The week in tech
Techies entering the week hoping for outstanding earnings reports were probably disappointed. On Friday, shares of chip designer Marvell Technology (Nasdaq; MRVL) took a beating after the company missed Q4 earnings estimates and guided lower than Wall Street expected for the first quarter.
Business-intelligence specialist Qlik Technologies (Nasdaq: QLIK ) also took losses this week, when the company's Q4 profit came in a penny less than expected. Revenue easily beat estimates, but it didn't matter. Traders didn't like that Qlik's management spent big on sales and R&D, even if doing so may help the company win the long war for supremacy in the increasingly lucrative market for mobile BI.
Despite this mixed bag of earnings news, both Apple (Nasdaq: AAPL ) and salesforce.com (NYSE: CRM ) provided investors with fresh evidence of innovation at work this week.
On Wednesday, Apple CEO Steve Jobs took a break from medical leave to show off a thinner and feature-rich edition of the iPad. Pricing didn't change, opening the way for Jobs to mock more expensive rivals. Talk about role reversal.
On Thursday, at the company's annual Cloudforce conference in New York, salesforce.com introduced Service Cloud 3. The new system allows customer-service agents to build cases around tweets or Facebook posts and elevate complaints to senior team members through Chatter. It's a neat idea made better by eliminating the barriers between departments that sometimes plague traditional contact centers.
As an investor, I enjoy this sort of disruptive innovation. History shows us that it's the disruptors that remake industries and unleash billions in stock market wealth.
But don't take my word for it. 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.
- IBM and Oracle got more competition this week, when Teradata (NYSE: TDC ) agreed to purchase the 89% of Aster Data Systems it didn't own for $263 million. Aster's clustering technology allows for fast, low-cost analytic processing of extremely high volumes of data. Expect both Big Blue and the Big O to respond -- either through deals or new marketing campaigns for their existing offerings.
There's your checkup. See you back here next week for more tech-stock talk.
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