Welcome to week 24 of my stock-picking throwdown with Mr. Market. Let's get right to the numbers:


Starting Price*

Recent Price

Total Return





Harris & Harris












Taiwan Semiconductor
















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

Thank you, techies. My average return improved 90 basis points, while the S&P fell more than a full percentage point. The gap between us has narrowed to just 16 basis points.

Will the real Mr. Market please stand up?
In recent weeks, some very smart investors have asked why this contest pits me against the S&P. A better benchmark would be the Nasdaq Composite, they argue. Certainly there's some truth to that. My tech portfolio, with an average beta of 1.3, is far more attuned to the volatility of the PowerShares QQQ (NASDAQ:QQQQ) index, whose beta is 1.27. The S&P 500 SPDR, by contrast, scores 0.99.

There's also an incentive to measure myself against PowerShares' Nasdaq mimic; it's down 37.7% since this contest began. I'd be outperforming by more than three percentage points, had I chosen it as my adversary.

So why use the S&P 500? Simple -- it's the benchmark we use for every newsletter. We also believe that a low-cost S&P index fund is the best alternative for investors who don't want the trouble of picking stocks.

The week in tech
Moving on to the latest news. After losing two of its top managers last week, disk-drive maker Seagate (NYSE:STX) this week reported a $1.02-per-share loss in its fiscal second quarter. The board also said it would slash Seagate's dividend by 75%.

On Wednesday, Apple (NASDAQ:AAPL) beat expectations for revenue and earnings. Analysts had higher expectations for iPhone sales, but the iPod Touch was every bit as successful as the early indicators suggested.

Microsoft (NASDAQ:MSFT) wasn't as fortunate. Revenue inched forward just 2%, and per-share profit fell 6%. CEO Steve Ballmer announced 5,000 layoffs in the wake of the report. "We are not immune to the effects of the economy. Consumers and businesses have reined in spending, which is affecting PC shipments and IT expenditures," Ballmer wrote in a somber memo to employees.

The only remedies for times like these are prudence in picking stocks -- stick with the very best -- and patience in waiting for gains. That's how David Gardner 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 reported huge spikes in Internet traffic as the world turned to the Web for coverage of the inauguration of President Barack Obama. Consumers accessed 7.7 million simultaneous streams during the event, more than triple the normal volume.
  • Big Blue issued a green earnings report on Tuesday, and predicted further gains in the year ahead -- a sharp contrast to the news from many of IBM's peers in the tech industry.

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

Get your clicks with more techie Foolishness:

Apple is a Stock Advisor selection. Microsoft is an Inside Value pick. Akamai and Harris & Harris are Rule Breakers recommendations. Try any of these Foolish services free for 30 days.

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