Welcome to week 128 of my stock-picking throwdown with Mr. Market. Let's get right to the numbers:


Starting Price*

Recent Price

Total Return

Harris & Harris (Nasdaq: TINY)$6.22$5.31(14.6%)
Taiwan Semiconductor$9.35**$13.6245.7%
S&P 500 SPDR$120.57**$131.158.77%

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

It may be snowy and cold outside, but inside Wall Street's marbled halls the heaters are turned on high. My five tech stocks gained an average of 328 basis points during the week, while the index added 284 basis points.

Strong economic indicators appear to be fueling the rally. The week brought news of lower unemployment, falling oil prices, improving consumer balance sheets, and strong earnings from American blue chips such as Kellogg (NYSE: K), which beat estimates in reporting a 7.4% increase in fourth-quarter profits.

All four of the major benchmark indexes gained, but small-cap stocks led the rally. The Russell 2000 ended the week up 3.19%, followed closely by the Nasdaq, which closed the week with a 3.07% gain. The S&P 500 added 2.71% while the Dow 30 rallied 2.27%, according to CNBC data.

The week in tech
Networkers were among the Nasdaq's best. Shares of optical components maker JDS Uniphase (Nasdaq: JDSU) ended the week up 34% after reporting fiscal-second-quarter results that easily beat estimates. Renewed enthusiasm for fiber networks helped boost revenue, but interestingly so did Microsoft. Mr. Softy's popular Kinect hands-free gaming controller contains JDSU components.

Acme Packet (Nasdaq: APKT) also mauled bears with a sterling quarterly report and higher 2011 guidance. Revenue soared 70% as the market's leading supplier of session border controllers for connecting networks told investors to expect $300 million in revenue and $1.05 in non-GAAP earnings for the year ahead. Both figures were well ahead of earlier estimates. Investors reacted by bidding the stock 30% higher last week.

Sirius XM Radio (Nasdaq: SIRI) stock enjoyed a strong rally. Shares of the satellite radio pioneer rose more than 8% last week when a Morgan Stanley analyst upgraded the stock to "overweight" and set a new price target: $2 a share. Color me unsurprised.

But the week's biggest winner could be Verizon (NYSE: VZ). On Thursday, the company opened up pre-orders for the iPhone ahead of next week's official launch. Two hours into the free-for-all, the carrier had set a new record for first-day sales. If these mouth-foamers are any indicator of long-term demand, Verizon could yield at least $6 billion in revenue in its first year of carrying the iPhone.

That's going to have downstream effects. Component makers, service providers, and of course carriers are all going to benefit from the disruptive innovation the iPhone represents. I'd keep a close watch. History says it's the disruptors that remake industries and in the process unleash millions in shareholder wealth.

But don't take my word for it. 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:

  • Nanotech venture capitalist Harris & Harris enjoyed its second liquidity event in two weeks when NeoPhotonics (Nasdaq: NPTN) finalized its IPO Tuesday. The stock was due to go public at $11 per share but opened at $14, and has since rallied more than 22% to close at $17.31. These are meaningful gains for Harris & Harris, which tends to value its portfolio at cost. The VC pegged its stake in NeoPhotonics as worth $6.75 million as of its last quarterly report, filed in November. Today that amounts to 400,900 shares purchased for no more than $16.83 apiece. Harris & Harris also bought 50,000 shares at the $11 offer price. All told, the VC looks to have added more than a half-million in new value to its portfolio over the past week.

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

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