How This Big Win Became a Loss for My Tech Portfolio

Each week, I report the results of the Big Idea Portfolio, a collection of five tech stocks that I believe will crush the market over a three-year period. I've done it before; my last tussle with Mr. Market ended with me beating the index's average return by 13.35%.

Real money was on the line then as it is now, which means any one of the five stocks you see below could cause me a lot of public embarrassment. This week, Google (GOOG 0.68%) turned negative for the first time in months. I'm at a loss to understand why.

Maybe demand has something to do with it? According to its devices feed at Google+, the Nexus 4 smartphone sold out within minutes in most territories. The Nexus 7 shows as still available but the high-end version of the Nexus 10 -- which competes with the top-of-the-line iPad -- still shows as "sold out." Usually it's Apple (AAPL 0.18%) reporting this sort of opening-week frenzy.

And that should be good for Google. Trouble is, with devices selling out so fast, the search king and Nexus 4 partner LG seem to have failed at properly anticipating inventory. Profits that were there for the taking may be headed elsewhere.

On the bright side, a strong showing by the Nexus 10 tablet offers even more evidence that analysts at the Consumer Electronics Association were lowballing when they predicted just 32 million tablets sold in the holiday quarter. Steep discounting by Amazon.com (AMZN 0.87%) for its existing Kindle Fire tabs could also add to the total.

What's the Big Idea this week?
So far, what "could be" isn't playing well with investors who seem determined to take profits till a rally convinces them to do otherwise. The resulting tech sell-off put me a shade behind Mr. Market for the third consecutive week in our battle for stock-picking supremacy.

But that also isn't saying much: All four of the major indexes declined this week. The Dow dropped 2.13% while the tech-heavy Nasdaq fell 2.34% and the S&P 500 declined 1.92%. The small-cap Russell 2000 led the losers with a 3.12% drop, according to data supplied by The Wall Street Journal. Here's a closer look at where I stood through Thursday's close:

Source: Yahoo! Finance.
* Tracking began at market close on Jan. 6, 2012.
** Adjusted for dividends and other returns of capital.

Notable newsmakers
None of the other stocks in my portfolio reported major news this week, though Rackspace and Riverbed continued to suffer at the hands of skeptics despite signs of continued growth. LinkedIn (LNKD +0.00%) suffered a similar fate when Facebook (FB 0.12%) revealed a new jobs app this week.

In earnings news, Cisco Systems (CSCO +12.55%) reported better-than-expected results and announced plans to help telecom carriers expand their high-speed wireless voice and data networks. The stock moved up as much as 7% following the favorable report, yet there remain good reasons to buy at current levels. Notably, a cheap valuation and a pressing need for infrastructure to support the coming spike in Internet traffic.

IDC pegs total spending on cloud computing services is on track to grow 18.5% annually to $43 billion by 2016. Few are investing as heavily in the cloud as Amazon, which this week announced a new data center in Sydney, Australia. Chief Technology Officer Werner Vogels broke the news on his blog, writing that there is "tremendous interest" in Amazon Web Services in the Asia-Pacific marketplace.

Will interest lead to income and higher returns? Neither Vogels nor anyone else can say for sure, which is why it's not surprising to see investors staying cautious. After all, there's a lot more than AWS to consider before buying shares of Amazon.