Welcome to week 76 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.

There's a scene in Rocky II where champ Apollo Creed asks his trainer why he's afraid to have Apollo fight Rocky again. The quote:

I saw you beat that man, like I've never seen no man get beat before, and the man kept coming after you. We don't need that kind of man in our life.

After a 468-basis point beating by Mr. Mr. Market, my tech portfolio looks as bloody today as Rocky did then. But I'm still in the ring, and we're still swapping punches.

This won't be an easy bout. Congress is talking as if Fannie Mae (NYSE:FNM) and Freddie Mac will soon be abolished, replaced by some other regulatory body for overseeing housing finance. The uncertainty has torpedoed new home purchases, which fell 7.6% in December. At the same time, an increasing number of homeowners are choosing to not walk away from houses where they owe more than their property's worth.

Fewer sales means fewer opportunities for financiers. Yet interestingly, not all mortgage bankers are suffering equally. Shares of JPMorgan Chase (NYSE:JPM) are down 9.1% year to date, while Wells Fargo (NYSE:WFC) is up more than 4% over the same period.

The week in tech
But that's nothing. Turbulence reigns among the digerati. Consider Google (NASDAQ:GOOG), whose shares fell more than 15% during January -- a breathtaking decline fueled in part by increased competition with Apple (NASDAQ:AAPL).

We've seen little evidence of success thus far. According to estimates, Google sold just 20,000 Nexus One smartphones during its debut week. By comparison, Apple sold 1.6 million iPhone 3Gs handsets in its first seven days on the market, and Motorola sold 250,000 Droid phones out the gate.

Worse, this isn't a friendly competition. Citing unnamed sources, Wired reported over the weekend that Apple CEO Steve Jobs was combative toward Google in comments made to employees in a town hall meeting following last week's unveiling of the iPad tablet computer.

Among other things, Jobs said that Google's "Don't Be Evil" mantra is, um, suspect (this is a family website, Fool) and that the Nexus One is an attempt to try and kill the iPhone, Wired reports. It's as if the famously mercurial Jobs now sees Eric Schmidt as he once did Bill Gates.

If true, it could result in a fascinating product war that would benefit consumers by raising the ante on innovation. But as is often the case in wars, there would also be casualties. One of these two companies won't be the same in five years.

History tells us so. Disruption is the rule rather than the exception in tech, and the resulting volatility can destroy even a good tech portfolio. Patience and diversification are the keys to unlocking long-term gains.

Look at David Gardner. He produced a decade of 20% returns in the real-money Rule Breaker portfolio by betting on a broad portfolio of innovators, and holding for the long-term. Tom Gardner's "simpleton portfolio" was also a 10-year winner. I believe that, with my tech portfolio, I will achieve similar success.

Checkup time!
Now let's move on to the rest of today's update:

  • Last week, Akamai reduced the size of its board form 12 to 11 seats with the retirement of Ronald Graham, and cut the size of executive equity awards. These shareholder-friendly moves were greeted with enthusiasm by Wedbush Morgan, which upgraded the stock to "outperform" from "neutral." Akamai reports fourth-quarter earnings after the bell on Wednesday.

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 Motley Fool Stock Advisor selection. Akamai, Google, and Harris & Harris are Motley Fool Rule Breakers recommendations. Try any of our Foolish newsletter services free for 30 days.

Fool contributor Tim Beyers is a member of the market-beating Rule Breakers stock picking team. He had stock and options positions in Apple and stock positions in Akamai, Google, 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 owns shares of Oracle and is also on Twitter as @TheMotleyFool. Its disclosure policy is tech-tastic.