| Company | Starting Price* | Recent Price | Total Return |
|---|---|---|---|
| Akamai | $22.23 | $19.44 | (12.6%) |
| Harris & Harris (Nasdaq: TINY) | $6.22 | $5.72 | (8%) |
| IBM | $126.97** | $101.73 | (19.9%) |
| Oracle | $22.69** | $21.04 | (7.3%) |
| Taiwan Semiconductor | $10.34 | $9.37 | (9.4%) |
| AVERAGE RETURN | -- | -- | (11.44%) |
| S&P 500 SPDR | $123.67** | $89.81 | (27.38%) |
| DIFFERENCE | -- | -- | 15.94 |
Source: Yahoo! Finance.
* Tracking began on Aug. 7, 2008.
** Adjusted for dividends and other returns of capital.
A bad week hit Mr. Market much harder than it did my tech portfolio, adding 162 basis points to my lead in this contest.
What little economic data we saw last week wasn't pleasing. The U.S. Labor Department said that 467,000 workers lost their jobs in June -- 100,000 more than economists had predicted, and almost 150,000 more than May's casualty rolls, USA TODAY reported. Recent cutters include Gannett (NYSE: GCI) and MySpace, which seems to be slouching toward irrelevance.
Layoff news hurt stocks. The S&P 500 fell more than 2% Thursday on concerns that the economy isn't recovering as fast as it should, or as the Obama administration had hoped. Stocks opened down again today after Vice President Joe Biden admitted in a Sunday interview on ABC's This Week that the administration hadn't fully anticipated the depth of the economic mess we're in. "We misread how bad the economy was, but we are now only about 120 days into the recovery package," Biden said.
These and other signs of economic Armageddon overshadowed the very good news that convicted fraudster Bernard Madoff on Monday was sentenced to 150 years in The Big House -- a de facto death penalty for the 71-year-old Madoff. Not enough investors cared. They'd apparently rather cash in and (perhaps) reenter when the economy improves.
The week in tech
Like the broader economy, tech had more than its share of sourpuss towel-throwers last week. Microsoft (Nasdaq: MSFT) is reportedly shopping Razorfish, the digital ad agency it acquired when it spent $6.6 billion for aQuantive last year. Yahoo! (Nasdaq: YHOO), meanwhile, is preparing to shutter Maven Networks, which it also acquired last year.
Amazon.com (Nasdaq: AMZN), for its part, has given up on North Carolina. The e-tailer last week booted all affiliates who legally reside there, preventing that state from forcing Amazon to add sales tax to purchases made by residents there.
But not everyone is throwing in the towel. I'm holding my Apple shares, and Sirius XM (Nasdaq: SIRI) won't give up on CEO Mel Karmazin, choosing instead to extend his contract to 2012 and bump his salary by 20%. The onetime satellite radio superstar is betting that Karmazin has what it takes to deliver for shareholders over the very long term.
That's appropriate. History says that tech investors do best when they're patient, as David Gardner has been. He produced a decade of 20% returns in the real-money Rule Breaker portfolio. Tom Gardner's "simpleton portfolio" was also a 10-year winner. With these five tech stocks, I believe I'll achieve similar success.
Checkup time!
Now, let's move on to the rest of today's update:
- Harris & Harris surged 12.8% during the week on little news. Perhaps a thawing IPO market is helping? Shares of LogMeIn (Nasdaq: LOGM) opened at $20 per share on Wednesday, well above the $16 price target that underwriters had set. Facebook is also primping itself for the bankers.
- The Department of Justice has asked for additional time to review Oracle's proposed acquisition of Sun Microsystems. Its sticking point may be Java, a mostly open-source platform and programming language that the DOJ could be loath to see Oracle control.
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