Welcome to week 140 of my stock-picking throwdown with Mr. Market. Let's get right to the numbers.


Starting Price*

Recent Price

Total Return

Akamai (Nasdaq: AKAM) $22.23 $34.43 54.9%
Harris & Harris $6.22 $5.22 (16.1%)
IBM $122.97** $170.58 38.7%
Oracle $22.33** $35.96 61.0%
Taiwan Semiconductor $9.35** $13.50 44.4%
AVERAGE RETURN -- -- 36.58%
S&P 500 SPDR $120.04** $136.43 13.65%
DIFFERENCE -- -- 22.93

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

Score another for Mr. Market. The S&P 500 reached a new high as my tech portfolio slid backwards, resulting in my giving back 310 basis points in this three-year contest. Lately, I've been unable to find consistent gains.

Such is the nature of investing in individual stocks. Short-run returns often wax between exhilarating and eviscerating. Indexers bear no such heartache, choosing instead to revel in low-cost ignorance of the market's daily machinations.

Those who looked up to see how their portfolios were faring had plenty to smile about. The Dow 30 surged 2.44% for the week, followed closely by the small-cap Russell 2000, which ended up 2.32%. The S&P 500 also did well, up 1.96%, while the Nasdaq enjoyed a 1.89% gain.

The blue-chip rally comes at an interesting time. This weekend marks Berkshire Hathaway's annual meeting, which value investors reverently refer to as "Woodstock for Capitalists." Several Berkshire holdings had big weeks. Kraft (NYSE: KFT) and Johnson & Johnson (NYSE: JNJ) hit multiyear highs on Friday, CNBC reports.

Chairman and CEO Warren Buffett will take questions as he always does, including (we hope) these five from my Foolish friend and Motley Fool Inside Value advisor Joe Magyer. LouAnn Lofton will also be on hand to find out why Buffett invests like a girl. Follow our live blog for his answers.

The week in tech
As a growth investor whose primary beat is tech, I'm interested in but not obsessed with Buffett's comments. There's no "Woodstock" for me. I'm just as thrilled to attend January's Consumer Electronics Show.

Or, better yet, Google's (Nasdaq: GOOG) upcoming I/O developer conference in San Francisco, where I expect to see new Android code and an updated Chrome OS and hear more about The Big G's efforts to fight Facebook in the social sphere.

Of course, Google isn't the only one creating value. Several tech up-and-comers reported outstanding earnings this week. Two cloud-computing stocks I've recommended to our Motley Fool Rule Breakers members notched big gains, but they paled in comparison with the numbers from NetGear (Nasdaq: NTGR), Ancestry.com (Nasdaq: ACOM), and Qlik Technologies (Nasdaq: QLIK). All three stocks have easily outperformed the S&P 500 so far this year.

Shares of NetGear soared as much as 28% yesterday, after the supplier of home-networking equipment blew away estimates for first-quarter revenue and earnings and then issued Q2 revenue guidance that, on the low end, was 12% higher than the average analyst estimate.

Ancestry.com said its Q1 net profit more than doubled on a 33% gain in its subscriber base. And like NetGear, management also guided higher. Executives expect the family researcher to book $98 million to $100 million in second-quarter revenue. Analysts had been calling for just $87 million.

Qlik destroyed top-line estimates but only met bottom-line expectations as management chose to continue investing in staff and technology. Good move. Qlik is at the front end of a multibillion-dollar opportunity to put business intelligence into the hands of millions more front-line employees, increasing productivity and, ultimately, profits. (Qlik says the average reported ROI on its QlikView software is 186%.)

History tells us we want to be invested at the front end of these shifts. It's when disruptions take hold and become mainstream that billions in new stock market wealth is created.

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.

  • For as many great tech earnings reports as there was this week, Akamai's wasn't one of them. The leading content-delivery network beat Q1 revenue and earnings estimates but issued disappointing Q2 guidance, and the stock ended the week down 14% as a result. So be it. Long-term holders should take encouragement from -- of all places -- the expense line. Cost of revenue rose 32% in Q1, reflective of CEO Paul Sagan's desire to invest now to capitalize on big Internet traffic increases in the years to come.

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 these stocks to your watchlist today: