Welcome to week 127 of my stock-picking throwdown with Mr. Market. Let's get right to the numbers.


Starting Price*

Recent Price

Total Return

Akamai (Nasdaq: AKAM) $22.23 $47.75 114.8%
Harris & Harris (Nasdaq: TINY) $6.22 $5.09 (18.2%)
IBM $123.46** $159.21 28.9%
Oracle $22.37** $32.00 43.0%
Taiwan Semiconductor $9.35** $13.11 40.2%
AVERAGE RETURN -- -- 41.74%
S&P 500 SPDR $120.57** $127.72 5.93%
DIFFERENCE -- -- 35.81

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

Put another tally on my side of the scorecard. A turbulent week in the stock market hurt Mr. Market more than it did my five tech stocks.

The crisis in Egypt helped create the roller coaster, but it was Ford's lackluster fourth-quarter report that gave it speed. The automaker's shares sold off more than 13% after the company badly missed earnings estimates. A broad sell-off followed.

For the week, the S&P 500 fell by 0.55% while the Nasdaq ended off 0.10%. The Dow 30 also fell, down by 0.41%. Of the major indices, only the small-cap Russell 2000 closed with the week with a gain, up by 0.29%, according to CNBC data.

Clinical Data (Nasdaq: CLDA) topped all U.S. performers with an 82% gain for the week. Last Friday, the Food and Drug Administration approved the company's depression treatment, Viibryd. Speculators betting on a favorable ruling are sitting on a tidy gain today. Such is the nature of biotech investing.

The week in tech
Several of the digital world's top stocks enjoyed nice rallies of their own, but not because of breakthroughs. Consolidation fueled the week's biggest tech gains.

On Friday, Verizon announced a $1.4 billion cash bid to acquire data-center specialist Terremark Worldwide (Nasdaq: TMRK). Big Red apparently wants to boost its hosting and cloud-computing services now that more smart devices are operating on its network.

Not surprisingly, the buyout fueled speculation elsewhere. Shares of Terremark peer Rackspace Hosting (NYSE: RAX) soared by as much as 11% as traders wondered whether it might become a target. SAVVIS, meanwhile, closed up more than 13%.

There's logic to the buying. Verizon and AT&T have at times struggled to keep pace with the demands of mobile-data consumers, and adding network capacity is the only way to address their needs. New data centers should also help the cause and, at the same time, allow the telcos to introduce enhanced cloud-centric services. AT&T has long used existing data-center capacity to compete with Akamai in Web-content delivery.

But if there's a move to consolidate the big players in Web infrastructure, there hasn't been nearly enough work to improve the infrastructure of the Web itself. Optical-networking specialist Infinera (Nasdaq: INFN) reported lower-than-expected Q4 revenue on Friday. Management's first-quarter outlook also failed to impress, as the stock fell by more than 17% after announcing results.

So be it. Infinera is the sort of disruptive innovator that we like at Motley Fool Rule Breakers. Why? History says it's the disruptors that remake industries and, in the process, unleash millions in shareholder 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.

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

  • Nanotech venture capitalist Harris & Harris enjoyed its first liquidity event in five years, when Amgen (Nasdaq: AMGN) this week announced plans to acquire H&H portfolio company BioVex for $1 billion.
  • Though my overall tech portfolio won the week, shares of Akamai have taken a beating because of perceived weakness in the cloud-computing realm. The stock is down by 2.51% over the past five trading days. It's notable that the sell-off follows the release of Akamai's quarterly State of the Internet report. Q3's numbers show more Internet users surfing at 35% faster peak connection speeds. Clearly, Akamai and its peers are performing as they're supposed to.

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

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