Welcome to week 146 of my stock-picking throwdown with Mr. Market. Let's get right to the numbers.
|Akamai (Nasdaq: AKAM )
|Harris & Harris
|Taiwan Semiconductor (NYSE: TSM )
|S&P 500 SPDR
Source: Yahoo! Finance.
*Tracking began on Aug. 7, 2008.
**Adjusted for dividends and other returns of capital.
Ouch! My tech portfolio positions fell an average of 7% for the week, far more than Mr. Market’s 2.3% decline. The result? For the first time in months, my lead in this three-year contest has fallen below 20 percentage points. This is what investing in tech can do to you over the short term.
But with indexes down for the sixth straight week, most stocks are suffering to some extent. On Friday, the Dow fell below the 12,000 mark for the first time since March and ended the week down 1.64%. Small caps took the biggest beating, with the Russell 2000 falling 3.54%, followed by the Nasdaq, which fell 3.26%, and the S&P 500, which was off 2.24%. Both the Nasdaq and the Russell have fallen into negative territory year to date, CNBC reports.
The specter of long-term unemployment for more than 9% of the U.S. population -- and underemployment for a great deal more than that -- continues to hang over the stock market. Fools visiting the White House this week got a glimpse of what President Obama and his team aim to do about the problem. Among the options, the administration seems to favor investment (e.g., loan guarantees to alternative-energy firms) over new stimulus (e.g., QE3), while Congress has its own ideas. Consensus is likely to be a way off.
Meanwhile, the week's top gainers were once more fueled by buyout offers. Shares of cardboard-box maker Temple-Inland (NYSE: TIN ) soared more than 36% after International Paper bid $3.38 billion in cash to acquire the company. Temple-Inland says it isn't interested.
The week in tech
In Silicon Valley, all eyes turned to Apple (Nasdaq: AAPL ) when the company formally introduced the new Mac OS X Lion and iOS 5 operating systems and iCloud. Traders weren't impressed; they were net sellers of Apple stock on an up day for the market.
Maybe that's because CEO Steve Jobs wouldn't describe iCloud as "magical" as he has with varying Macs, iPhones, and iPads. Instead, he came back to Apple's familiar "it just works" theme. The message? iCloud may not be a revolutionary breakthrough, but it's an improvement over MobileMe.
For now, that's really all Jobs can say. But over time, I believe, iCloud has a chance to be a game-changer for Apple and Hollywood. Why? Because with Apple's model, streaming doesn't have to mean "unlimited rentals." With iCloud for video, the Mac maker would give videophiles the same ability to create an access-anywhere digital library that iTunes-wielding audiophiles now have. Studios get the sales and licensing guarantees they want; Apple sells more devices that stream great content in high definition.
These are the sorts of opportunities David Gardner looks for. He produced a decade of 20% returns in the real-money Rule Breaker portfolio by betting on 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.
- Taiwan Semiconductor is pulling away from its closest peer, United Microelectronics (NYSE: UMC ) . In May, TSMC's sales rose 6.3% while UMC suffered a 6.8% decline thanks to Taiwan Semi's growing dominance in manufacturing chips at 28 and 40 nanometers, Reuters reported.
- Akamai fell to a new 52-week low of $29.25 on Friday. I'm not selling, but I'm also watching to see whether company insiders buy at these levels as they have in the past.
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: