These Tech Stocks Will Make Me Rich

Welcome to week 143 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 $34.20 53.8%
Harris & Harris $6.22 $5.40 (13.2%)
IBM $122.42** $170.16 38.9%
Oracle $22.33** $34.27 53.5%
Taiwan Semiconductor $9.35** $13.41 43.4%
AVERAGE RETURN -- -- 35.28%
S&P 500 SPDR $120.04** $133.61 11.30%
DIFFERENCE -- -- 23.98

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

Another week meant another week of losses for the indexes. All four markets fell while my tech portfolio held steady, resulting in 36 more basis points for my side of the scorecard in this three-year contest to see who can deliver the most value.

Losses didn't vary much among the major markets. The Nasdaq led the laggards, down 0.89%, while the small-cap Russell 2000 fell 0.79% and the Dow declined 0.66%. The S&P took a marginal loss, down just 0.34% for the week, CNBC reports.

Year-to-date, large caps continue to lead, with the Dow up 8.07% so far during 2011. American Express (NYSE: AXP  ) stood tall among the giants last week. The credit card issuer added 3.4% after ratings agency Moody's upgraded its debt outlook to "stable" from "negative," The Associated Press reports.

But it was small-cap eLong (Nasdaq: LONG  ) that led the gainers. Depository receipts of China's second-largest online travel agency surged more than 76% after Tencent Holdings spent $84.4 million to acquire a 16% stake in the company. Expedia (Nasdaq: EXPE  ) also increased its interest in eLong.

The week in tech
Out in Silicon Valley, IPO buzz returned with business-oriented social network LinkedIn (Nasdaq: LNKD  ) more than doubling on its first day as a public company. The stock trades for roughly 33 times sales as of this writing -- enough to make salesforce.com (NYSE: CRM  ) look cheap by comparison.

Interestingly, both have a stake in the success of social networking. LinkedIn's stock in trade is social job search; salesforce.com is making more by offering watercooler software called Chatter. Clients seem like to what salesforce.com is dishing.

Booked revenue climb 34% in Q1 while deferred revenue rose 38% and second-quarter guidance topped estimates. All signs point to accelerating growth. And that's despite Microsoft's efforts to disrupt salesforce.com with a cheap, online version of its Dynamics product for customer relationship management. Investors, sensing a competitive edge, bid up shares of salesforce.com by close to 8% on Friday.

Hewlett-Packard (NYSE: HPQ  ) , meanwhile, is doing everything it can to confirm the short thesis I first offered in October. The stock ended the week down 11% after a grim-sounding memo from CEO Leo Apotheker found its way online. Not long after, the PC maker would report uninspiring Q2 results and reduced full-year guidance.

Therein lies the danger of investing in turnaround stories. Too often, the turnaround never comes. I'd rather take my chances investing with entrepreneurs who dare to dream big. For history tells us these are the Fools who lead technology shifts that create billions in new stock market wealth.

Look at David Gardner. He produced a decade of 20% returns in the real-money Rule Breakers 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:

  • Shares of Akamai rose close to 5% on Friday after a regulatory filing revealed the co-founder and Chief Scientist Tom Leighton had instructed his family trust to purchase 50,000 shares at $32.66 apiece. We've seen Leighton buy on dips before, usually with outstanding results.

There's your checkup. See you back here next weekend for more tech stock talk. In the meantime, don't forget to keep up with my tech portfolio by adding these stocks to your watchlist today:

The Motley Fool owns shares of Oracle, Microsoft, and International Business Machines. Motley Fool newsletter services have recommended Akamai Technologies, salesforce.com, and Microsoft. Motley Fool newsletter services have recommended creating a diagonal call position in Microsoft. Motley Fool newsletter services have recommended a short position in salesforce.com. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Fool contributor Tim Beyers is a member of the market-beating Motley Fool Rule Breakers stock picking team. He owned shares of Akamai, 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. You can also get his insights delivered directly to your RSS reader.


Read/Post Comments (2) | Recommend This Article (2)

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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On May 23, 2011, at 4:26 PM, bottomfisherman wrote:

    Lets keep beating this horse if you are goning to. Akamai down 30 percent YTD!!!!!!

  • Report this Comment On May 23, 2011, at 6:01 PM, TMFMileHigh wrote:

    @bottomfisherman,

    >>Lets keep beating this horse if you are going to.

    Sure. Akamai up 53.8% since the beginning of this series, up 167.4% since our first pick in May of 2005, and up 164.9% for my real-money portfolio.

    Thanks for the opportunity and Foolish best,

    Tim (TMFMileHigh and @milehighfool on Twitter)

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