Welcome to week 78 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.

A flat week for my three-year tussle with Mr. Market -- I gained just one basis point -- was anything but for a number of stocks.

You'd think Toyota (NYSE:TM) would have the topped the list of losers. Last Tuesday, Japan's top automaker said it would recall 437,000 Prius hybrids due to a software glitch that can delay braking under certain conditions. Instead, shares of Toyota rallied close to 6% off their Monday close.

Other big gainers included Motorola (NYSE:MOT), up almost 8% after formally announcing a long-rumored plan to split. Mr. Moto will create two companies -- one for creating consumer devices, another for selling to big businesses and governments.

I'm in favor of the plan, mostly. If I don't buy shares, it'll be because I'm dubious of stocks that sell to governments in general, and the U.S. government in particular. Data from the non-partisan Congressional Budget Office shows that a precipitous decline in federal revenue has created much of the current budget deficit.

The implication? Aggressive spending cuts are virtually guaranteed, which could spell trouble for companies that depend on the feds to be consumers of their products.

The week in tech
Tech stocks should do well enough navigating the spending downturn. Few of Silicon Valley's finest are truly dependent on government patronage. Take Open Table (NASDAQ:OPEN). This Web-based restaurant reservations service was one of last week's biggest gainers, up more than 23% on a stellar earnings report.

Google (NASDAQ:GOOG) also had a big week, introducing its Google Buzz social network to both cheers and jeers. Those cheering like the flexibility of the service. Users can post directly into Buzz, via email, or add links to Twitter, RSS feeds, and Google's own Picasa photo-sharing service.

But it was the jeers that earned headlines, and deservedly so. Google violated users' privacy when it automatically connected new Buzz users to their most emailed contacts, and then made those contacts viewable at their Google profiles. The company has since apologized.

"We quickly realized that we didn't get everything quite right. We're very sorry for the concern we've caused and have been working hard ever since to improve things based on your feedback. We'll continue to do so," wrote Todd Jackson, product manager for Gmail and Google Buzz in a blog post.

At the same time, The Big G showed off more of its hugeness -- and a little loathing for AT&T (NYSE:T), Verizon (NYSE:VZ), and the rest of the telecom industry -- when it unveiled a plan to switch on ultra-high-speed fiber connections for up to 500,000 home users in several yet-to-be-named U.S. communities. Readers are mixed on whether this is a good or bad move for Google.

I'm also undecided. But if Google does take the next step to compete with telecoms directly, a bid for Level 3 Communications (NASDAQ:LVLT) could make sense. Level 3 owns one of the world's largest fiber optic networks.

Besides, history shows that disruption is the rule rather than the exception in tech. The resulting market volatility can destroy even the sturdiest of tech portfolios. 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:

  • Leaning on history as a guide, analysts quoted in a weekend feature in Barron's say that Oracle is likely to meet its operating income target with its acquisition of Sun Microsystems. I agree, and I'm as confident as the analysts Barron's quotes are that CEO Larry Ellison will lay off as many as it takes to meet his goal.

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

Get your clicks with more techie Foolishness:

Akamai, Google, Harris & Harris, and Open Table 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 owned shares of 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.