Welcome to week 153 of my stock-picking throwdown with Mr. Market. Let's get right to the numbers.
Akamai (NAS: AKAM)
Harris & Harris
S&P 500 SPDR
Source: Yahoo! Finance.
*Tracking began on Aug. 7, 2008.
**Adjusted for dividends and other returns of capital.
Next week ends my tussle with Mr. Market, and despite some recent setbacks, I'm pleased with where I'm ending up. Not that the Old Man isn't putting up a fight; the market clawed back nearly 6 percentage points in a week that my six stocks' average return plunged by more than 10%. Ouch.
Indexers took their licks, too. The Dow fell 4.24% for the week, leading a downtrend that saw the S&P 500 give back 3.92% and the Nasdaq fall 3.58%. The small-cap Russell 2000 declined 4.1% as stocks of all sizes fell on fears of a U.S. debt default.
Is the panic justified? Given that the crisis is one of Washington's making ... maybe. Certainly, the consequences of not getting a deal done would be huge. We just don't know how huge because we've never treaded this close to the precipice before. Read my Foolish colleague Morgan Housel''s reporting on the crisis before you even think of making any sort of major portfolio moves.
Why? Because as influential as macroeconomic events can be, the market always hosts at least a few winners whose fundamental performance deserves a second look. Consider True Religion Apparel (NAS: TRLG) , which soared as much as 16% in yesterday's trading after crushing estimates for the second quarter in a row. Luxury denim still wears well, even in a lousy economy.
The week in tech
If only we could say the same about WiMAX technology. Once thought to be the broadband standard of the future, the technology is rapidly losing ground to a telecom-backed standard called LTE and is killing its primary backer, Clearwire (NAS: CLWR) , as a result.
The stock fell roughly 24% in yesterday's trading after investors learned that an up-and-coming competitor, LightSquared, had signed a $9 billion agreement with Sprint Nextel (NYS: S) , its primary distribution partner. It's too soon to know whether Clearwire will be crowded off Sprint's network -- frankly, that seems unlikely -- but thoughts that Clearwire could become Sprint's go-to network for broadband are fading fast.
In the week's tech-earnings reports, Ancestry.com (NAS: ACOM) fell more than 14% on weaker-than-expected guidance and Stratasys (NAS: SSYS) suffered a better-than 20% drop when revenue missed expectations, while Equinix (NAS: EQIX) crushed both top- and bottom-line estimates on the way to a double-digit gain. The tech rally isn't dead, but it its breathing is a little labored.
Don't expect Motley Fool Rule Breakers chief David Gardner to care much. He produced a decade of 20% returns in the real-money Rule Breaker portfolio by investing in and holding innovators for the long term. Tom Gardner's "simpleton portfolio" was also a 10-year winner. I believe that my similarly styled tech portfolio could achieve similar results.
Now let's move on to the rest of today's update.
Want to know why my tech portfolio took a beating at the hands of Mr. Market this week? Blame Akamai. The Web-content delivery specialist came up short of the Street's consensus estimates for revenue and profits and guided to less than analysts -- and this Fool -- had hoped for. I'll be selling my shares of Akamai after this contest comes to an end next week. (Here are the details.)
There's your checkup. See you back here over the 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:
Add IBM to My Watchlist.
At the time thisarticle was published Fool contributorTim Beyersis a member of the market-beatingMotley Fool Rule Breakersstock-picking team and owned shares of Akamai, Harris & Harris, IBM, Oracle, and Taiwan Semiconductor at the time of publication. Check out hisportfolio holdingsandFoolish writings, or connect with him onGoogle+or on Twitter, where he goes by@milehighfool. You can also get his insightsdelivered directly to your RSS reader.The Motley Fool owns shares of Oracle and IBM.Motley Fool newsletter serviceshave recommended buying shares of Akamai Technologies, Stratasys, and Ancestry.com. Try any of our Foolish newsletter servicesfree for 30 days. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.
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