After an extended break, it's time to revisit my two-year throwdown with Mr. Market. Let's get right to the numbers:


Starting Price*

Recent Price

Total Return

Akamai (Nasdaq: AKAM)




Harris & Harris (Nasdaq: TINY)








Oracle (Nasdaq: ORCL)




Taiwan Semiconductor (NYSE: TSM)








S&P 500 SPDR








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

For those who don't understand why I invest in rule-breaking growth stocks, this is why. Akamai by itself has transformed good performance -- three of the four remaining stocks are market beaters -- into Outstanding Performance.

But let's say the other stocks weren't market beaters. If each of them were off 11%, about a point worse than the overall market, I'd still have a winning record. In fact, I'd be crushing the market: up an average of 11.3% per pick and outperforming the broader index by 21 percentage points. This, Fool, is the power of swinging for the fences with disruptive tech stocks.

I'll admit, as a member of The Motley Fool Rule Breakers team, I'm biased toward this strategy. And yet I think the market's recent inability to move much beyond a tight trading range suggests that most investors seeking outperformance are going to have to look for it among the outliers.

Mainstream stocks are too tightly hinged to macroeconomic events, government spending, and public policy debates. Consider BP. Analysts wonder if the British driller will suffer now that there's been another rig fire in the Gulf of Mexico. Fair? Probably not. But in the short term, stocks suffer (or profit) from rumors and speculations, returning to earth when the truth reveals itself.

Outliers need no such fuel. They win by changing the economics of an important, emerging business. Akamai has done that with Web content and video delivery.

The week in tech
Which will be the next tech outlier? Opinions vary, but Google (Nasdaq: GOOG) added to its resume this week with the introduction of Google Voice for Gmail.

I've used the service, and it's fantastic. Once activated as a "phone" in my Google Voice settings -- my iPhone and Skype line are the others -- making calls was as simple as clicking an icon in Google Talk or a live link in my Google Contacts address book. Most calls I've made have been as clear as on a landline.

My Foolish colleague Anders Bylund calls the new version of Google Voice a threat to traditional landline operators. I think he's right. There's no reason for me to have an analog business line when making calls from my Mac is easier and cheaper.

I'm less enthused by the prospects for the new Apple TV. Why? Price cuts don't equal a strategy, and yet that's all we have in this new box. Sure, $0.99 TV episodes are nice, and a streaming deal with Netflix is a coup, but the Mac maker has done nothing to address the big problems with home entertainment systems.

In other words, there's still room for an outlier in the battle for the living room. And you know what? That's good news. History shows that owning a diversified portfolio of disruptors can create massive amounts of wealth over the long term.

Look at Motley Fool co-founder 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:

  • Data storage sales are on the rise, but IBM isn't profiting from the trend nearly as much as I'd like. Big Blue remained second behind EMC in terms of market share, researcher IDC reported. The good news? IBM sat out an expensive bidding war for miniscule 3PAR (NYSE: PAR).

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

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True to its name, The Motley Fool is made up of a motley assortment of writers and analysts, each with a unique perspective; sometimes we agree, sometimes we disagree, but we all believe in the power of learning from each other through our Foolish community.

Akamai, Google, and Harris & Harris are Motley Fool Rule Breakers recommendations. Google is also a Motley Fool Inside Value pick. Apple and Netflix are Motley Fool Stock Advisor selections. 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 Google and Oracle and is also on Twitter as @TheMotleyFool. Its disclosure policy is tech-tastic.