Welcome to Week 6 of the Big Idea Portfolio. This time, big rallies in the shares of Apple (NAS: AAPL) and Riverbed Technology (NAS: RVBD) lifted my portfolio. Details below, but first let's dig into the numbers:
S&P 500 SPDR
Source: Yahoo! Finance.
*Tracking began at market close on Jan. 6, 2012.
**Adjusted for dividends and other returns of capital.
We're not even two months into this competition and already we've seen a five-point swing in the scorecard. Or, more accurately, a 4.9-point swing. Investors piled back into Riverbed after figuring that the recent sell-off failed to factor in upcoming product releases that may have led some customers to delay rather than cancel purchases.
Meanwhile, cash flows continue look extremely strong and Wall Street still expects Riverbed to produce five years of 22% annualized profit growth, pricing the stock at a perfectly reasonable 27 times estimated earnings. Good results for Cisco (NAS: CSCO) , whose profits came in 9% ahead of projections, may also have dispelled fears of weakening global demand for networking and telecom equipment.
While Riverbed moved 6 points, Apple moved 8 on rumors that the Mac maker will release a new iPad next month. According to a report in The Wall Street Journal, the new tablet will sport a more advanced graphics chip and faster processing core for rendering movies, games, and more on a 2048 x 1536 -- as in very high resolution -- Retina Display. CEO Tim Cook is apparently due to show off the device at a San Francisco event schedule for the first week of March.
New data from IDC may have also contributed to Apple's big move. The research says the iPhone was the world's top-selling smartphone in the fourth quarter, edging out prior leader Samsung by 70 basis points. The quarter's biggest loser? Nokia (NYS: NOK) , which suffered a 31% decline in shipments in losing 15 points of market share.
The week that was
Once more, fears over Greece's debt crisis took a perfectly good week in the market and turned it upside down. The S&P 500 fell 0.5% for the week, matching the Dow Jones Industrial Average, CNN reports. Mixed tech results didn't help matters. While LinkedIn surged as much as 18% on a massive beat, Activision Blizzard fell 3% when Q4 earnings left investors wanting more.
For some, the mild pullback is seen as needed relief from what's proved to be a nice rally in stocks year to date. More correcting is necessary, these skeptics say. But are they right? Foolish colleague Morgan Housel has run the numbers and concluded that, while there's a chance that shrinking margins will curtail corporate profits and stunt returns in the years ahead, history calls this threat overblown.
In either case, global portfolio diversity is a tech investor's best defense against a downturn. On Tuesday, I took to the airwaves with CNBC Asia to talk about why Taiwan Semiconductor (NYS: TSM) -- the world's largest contract chip manufacturer and a market-beating member of this portfolio's predecessor -- might be the safest play on the rise of smartphones worldwide.
There's your checkup. See you back here next weekend for more tech-stock talk. In the meantime, you can check out the Fool's latest special report -- "3 Stocks That Will Help You Retire Rich" -- and add the Big Idea portfolio stocks to your Foolish watchlist for ongoing, up-to-the-minute coverage. Both the report and the watchlist are 100% free to use:
At the time thisarticle was published Fool contributorTim Beyersis a member of theMotley Fool Rule Breakersstock-picking team. He owned shares of Apple, Google, Rackspace Hosting, Riverbed Technology, salesforce.com, and Taiwan Semiconductor at the time of publication. Check out Tim'sWeb home,portfolio holdings, andFoolish writings, or connect with him onGoogle+or Twitter, where he goes by@milehighfool. You can also get his insightsdelivered directly to your RSS reader.The Motley Fool owns shares of Apple, Cisco Systems, Activision Blizzard, LinkedIn, and Google and has written calls on Activision Blizzard.Motley Fool newsletter serviceshave recommended buying shares of salesforce.com, Riverbed Technology, Activision Blizzard, Rackspace Hosting, Apple, and Google, creating a synthetic long position in Activision Blizzard, writing covered calls in Riverbed Technology, and creating a bull call spread position in Apple. 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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