These Tech Stocks Will Make Me Rich

Welcome to week 48 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

$18.49

(16.8%)

Harris & Harris

$6.22

$5.17

(16.9%)

IBM

$126.97**

$100.83

(20.6%)

Oracle

$22.69**

$20.49

(9.7%)

Taiwan Semiconductor

$10.34

$9.68

(6.4%)

AVERAGE RETURN

--

--

(14.08%)

S&P 500 SPDR

$123.67**

$87.96

(28.88%)

DIFFERENCE

--

--

14.80

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

My tech portfolio took a bad enough beating to lose another percentage point to Mr. Market. But even then, all five of my holdings continued to outperform.

A strange week concluded with shares of the former General Motors surging some 40%, on news that the automaker had emerged from bankruptcy. Unfortunately, this "new GM" doesn't much resemble Ford (NYSE: F  ) , Toyota (NYSE: TM  ) , or other carmaking peers. This GM probably won't be a publicly traded entity until sometime next year.

Bankers aren't in much better shape. Prime mortgage foreclosures are up more than 26% over the past year. Meanwhile, subprime and Alt-A mortgages -- the so-called "liar loans" that helped pop the real estate bubble -- are today less of a problem than they used to be. Newly initiated subprime foreclosures fell more than 16%.

Yet this isn't exactly good news. What's to prevent further losses at Freddie Mac (NYSE: FRE  ) and Fannie Mae when not even prime loans are safe?

There's no easy answer to that question. All we can hope for in preventing the next crisis is better stewardship -- a moratorium on board bozos. Last week brought good news in this area: Come Jan. 1, NYSE members will no longer be allowed to vote for corporate directors without instructions from their clients.

The week in tech
Will the Nasdaq adopt a similar rule? I'm hoping so. Tech firms have had their share of board issues. Consider Apple (Nasdaq: AAPL  ) , whose directors have come under fire from yours truly and many others for failing to disclose that CEO Steve Jobs had a liver transplant while on medical leave. Last week, Bloomberg News reported that the SEC was still investigating whether the board had acted properly in handling news about Jobs' medical condition.

Hand-wringing over the SEC's decision to take a closer look at Apple's disclosure policies might have dominated the headlines, but there were plenty of big events elsewhere, too. Google (Nasdaq: GOOG  ) chose to lift Gmail and other software in its Apps suite out of beta, and challenged Microsoft (Nasdaq: MSFT  ) with a new operating system based in part on its Chrome browser.

When it comes to Chrome OS, skeptics abound, as evidenced both by our coverage and reader poll at Fool.com. Roughly 49% of you say that Microsoft will win this latest operating-system war. Still, think about what that says. More than half of the Fools surveyed believe that someone other than Mr. Softy will be the future OS king.

That's appropriate. History says that tech markets are prone to disruption, and that tech investors do best when they're patient. Just look at David Gardner, who patiently produced a decade of 20% returns in the real-money Rule Breaker portfolio. Tom Gardner's "simpleton portfolio" was also a 10-year winner. I believe that, with these five tech stocks, I will achieve similar success.

Checkup time!
Now, let's move on to the rest of today's update:

  • Akamai is enjoying more interest from Wall Street. In a profile of the company, Barron's declared the Web content delivery king a "critical" part of the online infrastructure, one on which consumers and businesses have come to depend. I agree.

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

Get your clicks with further techie Foolishness:

Akamai, Google, and Harris & Harris are Motley Fool Rule Breakers recommendations. Apple is a Motley Fool Stock Advisor selection. Microsoft is a Motley Fool Inside Value pick. Try any of our Foolish newsletter services free for 30 days.

Fool contributor Tim Beyers had stock and options positions in Apple and Google and stock positions in 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.

The Motley Fool is also on Twitter as @TheMotleyFool. Its disclosure policy is tech-tastic.


Read/Post Comments (1) | Recommend This Article (6)

Comments from our Foolish Readers

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 July 18, 2009, at 12:58 PM, riwaterman wrote:

    Hi

    I haven't researched your history on how your portfolio is set up but doing a comparison of the performance of a group of stocks VS any index or other group of stocks isn't entirely meaningful.

    If you invested the exact same amount in each of your portfolio stocks then perhaps you can average all of the stocks percentage gains or losses BUT if you put 25% into stock #1 10% into stock #2 and 5% into stock #3 and some other percentages into other stocks, then your average performance is much different. That's what real investors do.

    Have you done that?

    I enjoy reading your article in any case.

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