Welcome to week 49 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








S&P 500 SPDR








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

What a week for my tech portfolio! A huge rally and generous dividend payments added three percentage points an already large gap between Mr. Market and I.

Tech wasn't the only winner. Goldman Sachs (NYSE:GS) reported the best quarter in its history, producing $3.4 billion in net profit -- and that's after subtracting $426 million for dividends to taxpayers as a result of the TARP bailout. Shares of Goldman have rallied more than 10% since last Friday.

Even so, Wall Street seems to prefer biotechs to bankers, and some consumer-staples firms are still struggling to rally. Take Johnson & Johnson (NYSE:JNJ). Chief Financial Officer Dominic Caruso told investors that Q2 was "one of the most challenging quarters for year-over-year comparisons in our history." I'll say: Sales fell 7.4% and per-share earnings declined 1.7%.

The week in tech
Digitally inclined investors also had plenty of earnings reports to dig into, highlighted by good news from Intel (NASDAQ:INTC). The world's leading chipmaker blew away the Street's estimates, reporting $8 billion in revenue and $0.18 in non-GAAP per-share earnings. The downside? Both figures were lower year over year.

Google (NASDAQ:GOOG) didn't please investors as much as Intel did, but its numbers were better. Revenue improved 3%, and non-GAAP earnings grew 16%, to $5.36 per share. "These results highlight the enduring strength of our business model and our responsible efforts to manage expenses in a way that puts us in a good position for the economic upturn, when it occurs," CEO Eric Schmidt said in a statement.

Turning to the not-yet-public segment of the market, new data shows that both Facebook and Twitter could be more valuable than any of us had thought. Facebook now has 250 million users, and it engages them on a scale that rivals Yahoo! (NASDAQ:YHOO). Twitter, for its part, suffered a security breach that allowed some sensitive documents to become public, including financial projections. Management is targeting $140 million in revenue from 100 million active users by the end of 2010.

That's not as outrageous as it sounds. History says that tech markets are prone to disruption, and tech investors do best when they're patient -- just like David Gardner has been. He 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:

  • One week after Wall Street began to love Akamai again, Goldman Sachs analyst Derek Bingham now rates the top content delivery network (CDN) a "sell." He's cut his next-quarter and full-year estimates by a penny apiece. Bingham's reasoning? Increased competition from Limelight Networks (NASDAQ:LLNW) and others in Akamai's core CDN business. (Yawn.) We already know this is true. Wake me when rivals are cutting in on ad delivery and other enhanced services, which currently account for 50% of new revenue.
  • IBM was able to cut its way to growth in the second quarter, reporting 17.8% per-share earnings growth despite a 13.3% drop in revenue. But organic growth could be on the way: Big Blue raised full-year guidance to $9.70, from $9.20 per share.

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

Get your clicks with more techie Foolishness:

Akamai, Google, and Harris & Harris are Motley Fool Rule Breakers recommendations. Intel is a Motley Fool Inside Value pick. Johnson & Johnson is a Motley Fool Income Investor recommendation. Try any of our Foolish newsletter services free for 30 days.

Fool contributor Tim Beyers had stock and options positions in 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.