Welcome back to week 23 of the Big Idea Portfolio. This time, Mr. Market reclaimed some lost ground as Apple (NAS: AAPL) and salesforce.com rallied modestly. Details on these companies and more in a minute. 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.
Apple is the big story headed into this week. All eyes are on CEO Tim Cook as he takes to the stage to introduce the Mac maker's latest ideas at the annual Worldwide Developer Conference at the Moscone Center in San Francisco. Will there be a new Apple TV? Will we get a first look at the iPhone 5? We'll have answers to these questions and more as the day rolls on.
In the meantime, speculators appear to be betting the iPhone will continue to reign supreme in North America as worldwide adoption gains momentum. They're good reasons to be optimistic. Qualcomm, which supplies the iPhone's baseband modem, has introduced new chips compatible with China Mobile's (NYS: CHL) broadband network. A deal to sell the newest iPhone through China's largest telecom operator should be forthcoming.
Adding Baidu (NAS: BIDU) as a search partner could add to a frenzy that's seen ravenous consumers riot when denied access to Apple's gear. So strong is the appetite for the iPhone in China that 15 million people use unlocked iPhones with China Mobile's comparatively slow 2G network.
Other WWDC announcements could include updates to the iOS mobile operating system and shipping details for the newest version of the desktop system, Mac OS X Mountain Lion, which is expected sometime this summer. I'm expecting Cook and marketing chief Phil Schiller to preview new features of both operating systems.
In other news, a Russian hacker group successfully broke into at least two online networks last week. LinkedIn (NYS: LNKD) has been confirmed as one of the victims. As many as 6.5 million passwords were stolen and published; fortunately, it was without identifying user information.
For its part, LinkedIn says that it has disabled passwords for accounts it believes were at risk and that affected members have been notified. Experts quoted in coverage of the debacle say the experience reveals weaknesses in how LinkedIn encrypts user data. Investors don't seem to mind; the stock is up more than 2% since the day of the breach.
Finally, in a personal note, I've officially made good on a promise to re-up my investment in Netflix (NAS: NFLX) . On June 1, I purchased January 2014 calls with a strike price of $50 a share -- $10 less than I had intended, made possible by an unexpected decline in the share price. If I'm right and Netflix's subscriber additions come in better than expected or international growth provides meaningful earnings momentum, the value of my position could double over the next 18 months.
The week that was
Just when all seemed lost, stocks enjoyed their best week of the year. The small-cap Russell 2000 rallied 4.30% to lead the indices, followed closely by the Nasdaq's 4.04% gain. The S&P 500 rose 3.72% while the Dow's 3.59% bump put the index back in the black for 2012. Cheery investors also pulled the CBOE volatility index, or VIX -- widely regarded as the best indicator of fear in the market - back nearly 20 percentage points over the past five trading days, CNBC reports.
What caused the rally? Hopes that European regulators would act to forestall further crises in the region; hopes that are close to being realized with Spain asking for 100 billion euros in aid for its banking system. And yet today's failure to sustain bullish momentum suggests that investors remain nervous not just about the details of the Spanish bailout, but also forthcoming elections in Greece.
See you back here over the weekend for more tech stock talk. And remember to check out the Fool's latest special report -- "Forget Facebook -- Here's the Tech IPO You Should Be Buying" -- 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 Fools:
At the time thisarticle was published Fool contributor Tim Beyers is a member of theMotley Fool Rule Breakersstock-picking team and the Motley Fool Supernova Odyssey I mission. He owned shares of Apple, Google, Netflix, Rackspace Hosting, Riverbed Technology, and Salesforce.com at the time of publication. Check out Tim's web home, portfolio holdings and Foolish writings, or connect with him on Google+ or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader.The Motley Fool owns shares of Netflix, Baidu, China Mobile, LinkedIn Corporation Class A, Qualcomm, Salesforce.com, and Riverbed Technology. The Fool owns shares of Google. The Fool owns shares of Apple. Motley Fool newsletter services have recommended buying shares of LinkedIn Corporation Class A, Salesforce.com, Riverbed Technology, Baidu, Netflix, Google, Rackspace Hosting, and Apple. Motley Fool newsletter services have recommended creating a stock position in Riverbed Technology. Motley Fool newsletter services have recommended creating a bull call spread position in Apple. Motley Fool newsletter services have recommended creating a bear put spread position in Salesforce.com. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.
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