Welcome to week 60 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.

Ugh. An ugly week for my tech portfolio handed 186 basis points back to Mr. Market in our contest. Where are you, tech rally?

Mired in the health-care debate, I suppose. This never-ending saga is filled with lies, half-truths, and false choices. The din is inescapable, and often obfuscating. Perhaps that's because few want to address what seems to be the central concern in this debate. My Foolish colleague Brian Orelli explains it better than I can:

The problem with complaining about profits is that profits are what allow all of us to live longer. ... There's no reason to expect Pfizer (NYSE:PFE) or Merck (NYSE:MRK) to develop new drugs if there isn't profit involved.

Interestingly, false logic has a way of creeping into valuations as well as debates. Consider Legg Mason (NYSE:LM). The stock lost 87% of its value from October 2007 and the market bottom. But that was a mistake. Investors failed to account for Legg Mason's sturdy balance sheet, and the stock has since tripled from its lows.

Trouble is, the underlying reasons for worrying about the economy haven't changed. Not as far as Moody's is concerned, anyway. Nearly 300 well-known companies are in danger of going bankrupt, including American Airlines parent AMR (NYSE:AMR) and Las Vegas Sands (NYSE:LVS), according to the ratings specialist's estimates.

The week in tech
Balance sheets have long been a tech strength, so a spate of bankruptcies isn't likely. But is tech due for a broad rally? I'm skeptical.

My guess is that some techies have topped out. Consider Research In Motion (NASDAQ:RIMM). Though still a grower on the top line, RIM failed to meet the Street's consensus revenue projections for the coming quarter, and the shares fell by 17%.

More disappointment seems likely. RIM badly lags most of its peers in creating a software ecosystem for its BlackBerry devices, and Palm (NASDAQ:PALM) this week introduced a new version of its webOS -- a budding platform for which developers have already expressed affection.

Palm is one of many that could disrupt RIM. Innovative upstarts have a way of turning tech's titans into also-rans on history's scrap heap. That's why tech investing is best practiced in a diversified, patient manner. Look at David Gardner. He produced a decade of 20% returns in the real-money Rule Breaker portfolio by sticking with innovators. 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:

  • Is Akamai trying to deceive investors? I don't think so, but claims that its network can broadcast high definition video to your iPhone are specious at best. Industry analyst Dan Rayburn explains why.
  • Meanwhile, IBM says it will offer corporate customers a Web-based business email system based on its Lotus Notes productivity suite.

There's your checkup. 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. Pfizer is a Motley Fool Inside Value pick. The Motley Fool owns shares of Legg Mason. Try any of our Foolish newsletter services free for 30 days.

Fool contributor Tim Beyers owned shares of 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.