Welcome to week 87 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 (NYSE: TSM)
















Source: Yahoo! Finance.
* Tracking began Aug. 7, 2008.
** Adjusted for dividends and other returns of capital.

Even as Mr. Market gets closer to even, he's falling behind my tech portfolio. Trouble is, the gains may have as much to do with investors' healthy appetite for all shares digital as with any stock-picking prowess I might possess. The Nasdaq 100, a tech-heavy index, has risen 1.8% since my last report.

Tech may be establishing itself as a relative safe haven in light of new charges levied against Goldman Sachs (NYSE: GS) by the Securities and Exchange Commission (SEC). Among other things, the SEC alleges that the banker allowed celebrated hedge fund manager John Paulson to profit from a trade that may have bilked its other clients.

The only thing that surprises me about these accusations is that I'm not surprised at all. I'm no cynic; I've just seen this before, as have most investors. They're running for cover in the form of tech stocks with pristine balance sheets.

Cold, hard cash is apparently the only comfort left to investors who have become unnerved by banks’ outsized share of corporate profits and increasing concentration of assets. The top four U.S. banks possessed assets equal to 52% of U.S. GDP in 2009, up from these banks’ combined 5.2% share of GDP in 1992. Nothing is safe, not even gold.

The week in tech
Fortunately, we've seen little if any panic selling. But profit taking? That's another story. Shares of Google (Nasdaq: GOOG) nosedived after the search king beat Wall Street's average profit estimate by $0.16 per share.

Revenue rose 24% before traffic acquisition costs. Google Chief Financial Officer Patrick Pichette told analysts in its earnings conference call that "large advertisers have come back in force versus last year."

Translation: We're making more from Very Big Clients, so you can count on us for continued growth.

Of course, Google won't go unchallenged. Apple's (Nasdaq: AAPL) iPhone 4.0 operating system introduces a new developer platform called iAd that will facilitate advertising within apps rather than sending users into Safari. It's an interesting idea that could crowd out Google as an iPhone ad supplier, and disrupt Omnicom (NYSE: OMC) and other traditional Madison Avenue ad creators.

Advertising innovation has also become the watchphrase for social-media darling Twitter. Last week, the company announced a plan to pair searches with ads, mimicking Google. Over time, Twitter plans to allow advertisers to insert ads into users' individual tweet-streams.

Finally, Palm (Nasdaq: PALM) said in an SEC filing that Michael Abbott submitted his resignation a week ago today. Abbott has been Palm's senior vice president for software and services, and therefore the executive responsible for the development of Palm's well-received webOS smartphone platform.

Sound bad? It gets worse. In the same filing, Palm said it had implemented a retention program for "certain key employees" that included restricted stock and a $250,000 cash commitment to both Jeffrey Devine, senior vice president of global operations, and Douglas Jeffries, chief financial officer. Palm said the awards would vest over two years.

More than a few pundits are likely to pen Palm's epitaph once more as a result of Abbott's leaving. They may be right. Tech has produced as many busts as it has winners. And yet history shows that owning 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:

  • Taiwan Semiconductor Chairman Morris Chang said at a company symposium last week that he expects global chip sales to rise 22% this year, slowing to an annual rate of 4.2% from 2011 to 2014, Reuters reports.

See you back here next week for more tech stock talk.

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This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.