Welcome to week 55 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.

The backslide continues: My tech portfolio lost 75 basis points in week three of year two of this thee-year race. I'm still confident that I'll win, but I'd be lying if I told you I wasn't nervous -- no sane investor ever likes to lose to the index, even over the very short term.

Winning could become more difficult thanks a slew of artificial stimulus that's obscuring the real risk level in industries that drive U.S. economic growth, such as health care and financial services. Health care in particular is a problem. A contentious debate over reform has increased the risk of holding stocks such as Aetna (NYSE:AET), Humana, and their health-care-industry peers.

Financial services firms such as Citigroup (NYSE:C) have a different problem -- a trust problem -- for which they can thank jailbirds such as Bernie Madoff and R. Allen Stanford. Last week, the plea-deal confessional of Stanford's former finance chief, James Davis, was unsealed, and what lay within was a sordid tale of miscreant behavior. An extreme example: Stanford was apparently so desperate to preserve his Ponzi scheme that he allegedly convinced one of Antigua's top financial regulators to become his "blood brother." Cue The Sopranos theme.

But reputations aren't all that needs repairing when it comes to the big banks. Balance sheets also remain a problem -- a problem that could soon get worse. The FDIC last week said it was short on cash, even as it faces a slew of new small bank failures. Citigroup, JPMorgan Chase (NYSE:JPM), and their plus-sized peers could be called upon to cover the shortfall via capital-draining special assessments.

Hey, someone has to pay the price.

The week in tech
Meanwhile, in the tech sector, the news could hardly be better. Dell (NASDAQ:DELL) reported better than expected sales and earnings, even though both were down on a year-over-year basis.

More importantly, CEO Michael Dell said in a statement that technology buyers are starting to come back: "If current demand trends continue, we expect revenue for the second half of the year to be stronger than the first half."

Research backs up that claim. Moody's Investors Service now projects that corporate spending on PCs and other technology hardware will improve due to the "aging of the installed base," a good sign for Dell and new entrant Accenture (NYSE:ACN), which has started building custom-designed devices for its clients, BusinessWeek is reporting.

Meanwhile, in the hypergrowth smartphone market, China Mobile (NYSE:CHL) last week inked a deal with HTC in anticipation of an iPhone invasion. That came on Friday, when Apple (NASDAQ:AAPL) announced a distribution agreement with China Mobile's chief competitor, China Unicom.

How soon Apple will reap profits from this deal is unclear, but that's fine. History says that tech investors do best when they're patient, as 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:

  • Shares of Akamai competitor Limelight Networks took a beating on Friday, falling 9%, after a Raymond James analyst downgraded the stock on pricing pressure from Akamai and venture-backed peers such as BitGravity and EdgeCast.
  • Oracle's acquisition of Sun Microsystems can't close soon enough. The server maker reported a $0.20 per share loss in its fiscal fourth quarter. Revenue declined 31%.
  • SPSS has set Oct. 2 as the date for a special meeting in which the company's board will ask shareholders to approve a $1.2 billion sale to IBM. 

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

Get your clicks with more techie Foolishness:

Akamai, and Harris & Harris are Motley Fool Rule Breakers recommendations. Accenture and Dell are Motley Fool Inside Value selections. Apple is a Motley Fool Stock Advisor selection. Try any of our Foolish newsletter 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.