Welcome to week 109 of my stock-picking throwdown with Mr. Market. Let's get right to the numbers.


Starting Price*

Recent Price

Total Return

Akamai (Nasdaq: AKAM)




Harris & Harris








Oracle (Nasdaq: ORCL)




Taiwan Semiconductor
















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

A seesaw week gave a slight advantage to Mr. Market in our three-year race to the top, but I'm still ahead by more than 30 percentage points. I've been fortunate, to say the least.

My guess is that chasing outsized returns is going to keep getting tougher as Washington stumbles in the dark, reaching for an answer to how to work through the jobless recovery we're suffering through as a nation. National unemployment stood at 9.6% in August.

Former President Bill Clinton has a plan for bringing back jobs, and it involves subsidized job training to fill current openings. He estimates that the jobless rate would drop to 7% or less if employers were able to fill their advertised needs. But this is also harder than it sounds; training can't replace experience, and forcing corporations to hire trained yet inexperienced workers could prove disastrous.

Even so, fresh economic data says the recession is over. The National Bureau of Economic Research says the nation got its growth mojo back in June 2009. Stock market data would seem to support that conclusion: The S&P 500 has risen by roughly 25% since June 1 of last year.

For investors, this raises a perplexing and as-yet-unanswered question. How important is the unemployment rate to the health of the stock market?

The week in tech
Whatever the answer, what we know about tech is that software development requires brainpower that can't be easily automated. As such, improving employment rates in tech hubs Silicon Valley, Seattle, Boulder, San Francisco, Boston, Portland, and New York could foreshadow increased earnings.

This is also true of minor tech hubs such as Raleigh, N.C. Red Hat (NYSE: RHT) calls Raleigh home. Shares of the leading Linux distributor hit a fresh 52-week high on Thursday after reporting a 20% increase in revenue. Management also raised guidance, citing improving business conditions.

Red Hat's story has become a common one. Several tech issues have crushed the market in 2010. But we also needn't discount the plodding performers, for it's these undervalued issues that tend to create long-term wealth. Microsoft (Nasdaq: MSFT) is this sort of stock, and that's the reason the Fool recently bought shares of the software giant for its portfolio of "11 O'Clock" stocks.

I like the call. Mr. Softy is priced inexpensively, and cheap stocks make for good ballast in a portfolio of high achievers. Yet it's the disruptors that, judging by history, end up as millionaire-maker stocks.

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:

  • At Oracle's annual meeting this week, CEO Larry Ellison told shareholders that they'd see his company buy up chip suppliers, Bloomberg reports. The goal? Be more vertically integrated, like Apple (Nasdaq: AAPL). I've doubts whether this is the right strategy, especially since Oracle already owns rights to the SPARC server architecture it acquired with Sun Microsystems. I'll have more on this in a follow-up commentary.
  • An Oppenheimer & Co. analyst this week raised its price target for Akamai from $47 to $58 per share and maintained a rating of "outperform." According to the Associated Press, the increasing popularity of video drove the upgrade. Color me unsurprised; Akamai CEO Paul Sagan has been touting his company's video business for months.

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

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Akamai is a current Motley Fool Rule Breakers recommendation. Harris & Harris is a former Rule Breakers pick. Apple is a Motley Fool Stock Advisor selection. Microsoft is a Motley Fool Inside Value pick. Motley Fool Options has recommended that subscribers open a diagonal call position in Microsoft. 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, 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. You can also get his insights delivered directly to your RSS reader. The Motley Fool owns shares of Apple, IBM, Microsoft, and Oracle and is also on Twitter as @TheMotleyFool. Its disclosure policy is tech-tastic.