Welcome to week 83 of my stock-picking throwdown with Mr. Market. Let's get right to the numbers:
Company |
Starting Price* |
Recent Price |
Total Return |
---|---|---|---|
Akamai |
$22.23 |
$31.39 |
41.2% |
Harris & Harris |
$6.22 |
$4.77 |
(23.3%) |
IBM |
$125.26** |
$127.71 |
1.9% |
Oracle |
$22.54** |
$25.19 |
11.8% |
Taiwan Semiconductor |
$9.81** |
$10.09 |
2.9% |
AVERAGE RETURN |
-- |
-- |
6.90 |
S&P 500 SPDR |
$122.43** |
$115.97 |
(5.28%) |
DIFFERENCE |
-- |
-- |
12.18 |
Source: Yahoo! Finance.
* Tracking began on Aug. 7, 2008.
** Adjusted for dividends and other returns of capital.
Tired of taking a beating from my tech portfolio, Mr. Market put up strong enough numbers to take back two percentage points from me in this contest.
Good economic data provided much of the tailwind. Also helping was -- surprise! -- the Federal Reserve. Much maligned by Fools for keeping interest rates artificially low, the nation's central bank apparently won't raise rates until we've achieved a full economic recovery.
But that could take years, and in that time the U.S. government will spend billions for health-care reform that was signed into law this morning by President Obama. We won't know the real per-household effects of this legislation for a while, but if there are savings to be had, it could act as a long-term stimulant.
In the meantime, the Senate is considering a broad-based financial reform package authored by outgoing Connecticut Sen. Chris Dodd. But as my Foolish colleague Matt Koppenheffer writes, the bill wouldn't change regulatory conditions enough to prevent another financial crisis.
Doesn't exactly sound like a pristine environment for investors, does it? Nope.
The week in tech
What this means for tech stocks is a lot less clear, but we know that more than a few top techies are under assault. Take Palm
My Foolish colleague Rick Munarriz doesn't see Palm heading to zero, but I'm not so sure. There's no immediate need for Nokia
Google
Finally, and as expected, Sirius XM Radio
So why is the Nasdaq rattling its saber? Because penny stocks are risky and Sirius, while not your average penny stock, has the share price of one.
Sirius investors are betting that the rewards for investing at current prices more than outweigh the risks. It'll be some time before we know whether they're right or wrong, but we know from history that a diversified portfolio of disruptors can create massive amounts of wealth.
Look at David Gardner. He produced a decade of 20% returns in the real-money Rule Breaker portfolio by betting on a collection of innovators, and then holding them 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:
- After a strong rally over the past several weeks, a Citigroup analyst downgraded shares of Akamai on the basis of valuation, Barron's reports. I'd agree over the short term, but with the company cutting prices and winning big accounts, I'd have no problem buying for the long-term at these levels.
There's your checkup. See you back here next week for more tech stock talk.
Get your clicks with more techie Foolishness:
- Would you call this tech empire at $300 billion?
- Looks like Google wants to be on your TV after all.
- Flash technology is here to stay. For a while, anyway.