Welcome to week 135 of my stock-picking throwdown with Mr. Market. Let's get right to the numbers.


Starting Price*

Recent Price

Total Return

Akamai $22.23 $38.45 72.9%
Harris & Harris $6.22 $5.34 (14.1%)
IBM $122.97** $162.18 31.9%
Oracle (Nasdaq: ORCL) $22.37** $32.64 45.9%
Taiwan Semiconductor $9.35** $12.24 30.9%
AVERAGE RETURN -- -- 33.5%
S&P 500 SPDR $120.04** $131.20 9.29%
DIFFERENCE -- -- 24.21

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

Finally. After several weeks of beatings at the hands of Mr. Market, my tech portfolio added more than 400 basis points to my lead in this three-year contest to see who can deliver more value for shareholders. Eat that, old man.

Or don't. Most investors made money during the week. The Nasdaq topped the indexes with a 3.76% gain, followed closely by the small-cap Russell 2000, which was up 3.67%. The Dow 30 rallied 3.05% while the S&P 500 lagged, up just 2.70% according to CNBC data.

The lucky ones had money on digital commerce. Shares of Drugstore.com (Nasdaq: DSCM) more than doubled during the week, after Walgreen agreed to purchase the online pharmacist for $3.80 per share. Online travel-deals cataloguer Travelzoo (Nasdaq: TZOO) rallied more than 30%, continuing an impressive run fueled by outrageous overseas subscriber growth and insider buying.

The week in tech
Yet what was true for most digital-commerce stocks wasn't true for all. Ebix (Nasdaq: EBIX), whose e-commerce software serves insurers, fell 26% after a scathing report from an anonymous short seller posted to investing site Seeking Alpha.

Both the Motley Fool Rule Breakers and Motley Fool Pro teams have since taken a close look at the allegations and concluded that there are too many problems with it to elicit a sale or any other sort of dramatic change in rating for either service. But as Fools, the right move is for each of us to perform our own due diligence.

In equally controversial news, Howard Stern's production company this week filed suit against Sirius XM Radio (Nasdaq: SIRI) for failing to pay performance-based stock awards allegedly owed to the shock jock. Sirius has yet to respond.

Finally, Apple (Nasdaq: AAPL) sued Amazon.com (Nasdaq: AMZN) for trademark infringement this week. The Mac maker says the e-tailer's "Amazon Appstore for Android" too closely resembles the "app store" mark Apple owns. Maybe, might it also be retaliation for forcing Apple to pay license fees for using the term "1-click ordering" in its Apple Store?

Regardless, what matters here is whether Amazon's new Android bazaar amounts to a disruptive innovation that will persuade developers to spend more time writing for the OS and less time writing for Apple's iOS alternative. If it does, expect Amazon and much of the Android ecosystem to reap the windfall.

That's how disruptive innovation works. 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:

  • Oracle blew away estimates in reporting fiscal third-quarter results. The database king said revenue increased 37% to $8.76 billion while per-share profit rose to $0.54, thanks mostly to big contributions from the hardware business created when it acquired Sun Microsystems. Analysts were expecting $8.67 billion and $0.50, respectively. Clearly, this growth story is far from over.

There's your checkup. See you back here next weekend for more tech stock talk. In the meantime, don't forget to keep up with my tech portfolio by adding all five stocks to your watchlist.