Welcome to week 130 of my stock-picking throwdown with Mr. Market. Let's get right to the numbers.


Starting Price*

Recent Price

Total Return

Akamai $22.23 $41.57 86.9%
Harris & Harris $6.22 $5.95 (4.3%)
IBM (NYSE: IBM) $122.97** $164.84 34.0%
Oracle $22.37** $33.68 50.6%
Taiwan Semiconductor $9.35** $12.81 37.0%
AVERAGE RETURN -- -- 40.84%
S&P 500 SPDR $120.57** $134.25 11.35%
DIFFERENCE -- -- 29.49

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

Score another one for Mr. Market. Thanks to more tech turbulence, my portfolio gave back another 102 basis points in this content, for a total of 676 in two weeks. Ugh.

All four major indices rallied, but those with big interests in little stocks did best this week. The small-cap Russell 2000 set the pace, up 1.44% versus 1.04% for the S&P 500. The Dow 30, up 0.96%, rallied for the third consecutive week, while the tech-heavy Nasdaq lagged at up 0.87%, CNBC reports.

Among industries, small-cap biotech offered the week's biggest winner. KV Pharmaceuticals (NYSE: KV-A) doubled after the Food and Drug Administration this week approved the company's drug for helping reduce the risk of preterm birth. The stock has more than tripled over the past year.

But even though KV and other small caps dominated the week's headlines, blue chips have been the story year-to-date. The Dow 30 is up 7.03% in 2011, 17 basis points better than the Nasdaq. Seven components have posted double-digit returns in that time. Walt Disney (NYSE: DIS) leads the group, up 16.5% so far, according to Morningstar.

The week in tech
You can include blue-chip techies in that list. IBM is up 12.4% year-to-date, and peer Hewlett-Packard (NYSE: HPQ) has gained 15.5%, partially on the belief that new Palm-based smartphones and tablets will become legitimate alternatives to iOS and Android models.

Dell (Nasdaq: DELL) has a horse in the Android side of that race, but it was services rather than smartphones that helped the company surprise investors in reporting results this week. Services represented 29% of revenue in Q4, helping the company boost gross margin by more than 400 basis points over last year to 21%. The stock soared 12% on the news.

NVIDIA (Nasdaq: NVDA) investors enjoyed a similar rally on Thursday, after the company beat analysts' estimates for fourth-quarter earnings by $0.07 a share. A growing list of smartphone and tablet design wins could help NVIDIA keep momentum in the quarters ahead.

WiMAX network operator Clearwire (Nasdaq: CLWR), which reported fourth-quarter earnings on Thursday night, appears to be benefiting from the same dynamic. Revenue more than doubled in Q4 as the company added 1.5 million new subscribers to its high-speed wireless service. Executives also projected a 2012 profit before interest, taxes, depreciation, and amortization.

If they're right, Friday’s 8% rally will look like chump change in a year or two.

That's how disruptive innovation works. Remake an industry -- in Clearwire's case, telecom -- and you unleash billions in market value.

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.

  • IBM took the first step toward putting a machine on Hollywood's Walk of Fame when its "Watson" supercomputer beat former Jeopardy! champions Ken Jennings and Brad Rutter in a televised showdown. It wasn't a close contest. Watson amassed $77,157 in winnings over three days and two shows, versus $24,000 for Jennings and $21,600 for Rutter, Network World reports.

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

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Akamai is a Motley Fool Rule Breakers recommendation. Disney and NVIDIA 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 owned shares of Akamai, Disney, 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. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool owns shares of IBM and Oracle. The Fool is on Twitter as @TheMotleyFool. Its disclosure policy is tech-tastic.