These Tech Stocks Will Make Me Rich

Welcome to week 31 of my stock-picking throwdown with Mr. Market. Let's get right to the numbers:

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

Another week, another gain. This time, I was up over two percentage points on Mr. Market.

This can't continue forever, of course. Tech stocks are far too volatile to outperform every week. Yet I have a long-term advantage. Whereas I'm tracking just 5 stocks, Mr. Market carries the burden for 500, many of which are financial services firms that have come under assault. General Electric (NYSE:GE), whose debt was recently downgraded by S&P and carries lingering questions regarding its finance arm's commercial loans and debt covenants, is a good example.

Even when Citigroup (NYSE:C) reports better-than-expected news, other firms drag down the index enough that my growth-oriented techies gain a little distance. And then a little more, and a little more after that, and a little more after that, and...

The week in tech
So even if we're on our way to Dow 10,000, my techies should continue to run faster than the broader market. They'll be lifted by the investments that they're making now, when talent, goods, and services have gone cheap.

Consider Apple (NASDAQ:AAPL). This week, reports surfaced that the company is buying 10-inch touchscreens in bulk from a Taiwanese supplier to create what others and I have long anticipated: an iTablet Mac. There's a ready-made market for this sort of device among enthusiasts and, if released, could boost revenue and profits mightily.

Google (NASDAQ:GOOG), meanwhile, upgraded its Grand Central phone service yesterday to create a new product called Google Voice. The early version is available only to existing Grand Central users but its feature list looks promising: free calls in the U.S., low international rates, voice mail transcription, and directory assistance, for example.

Other techies simply lack the capital for meaningful investment. Take Sirius XM (NASDAQ:SIRI). The satellite radio survivor this week, and for the first time, refused to supply guidance on its subscriber count. Pessimists will tell you that this means Sirius is losing listeners. They may be right. (I'll have more on this in a separate story to run Monday.)

So be it. History shows that panicky markets like these reward prudence in picking stocks -- stick to 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:

• IBM chief executive Sam Palmisano on Monday issued a letter to shareholders in which he called the recession a "major shift in the global economy" and promised to "go on offense" in the search for new revenue-generating infrastructure projects. Days later, Big Blue announced a new service for monitoring and managing water supply systems.
• On Tuesday, Taiwan Semiconductor sharply raised its first-quarter revenue and margin guidance due to what Reuters called "rush orders from ... the mainland Chinese market." Sweet.

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

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