Each week, I endeavor to report the results of the Big Idea Portfolio, a collection of five tech stocks that I believe will crush the market over a three-year period. I’ve done it before; my last tussle with Mr. Market ended with me beating the index’s average return by 13.35%.
Real money was on the line then as it is now, which means any one of the five stocks you see below could cause me a lot of public embarrassment. Apple Inc. (NASDAQ:AAPL) has caused the most trouble over the past several months. Count this week’s 3.5 percentage-point drop as the latest dip.
Apple Inc. (NASDAQ:AAPL)’s stock price has fallen more than 33% over the past 12 months and is down 20% year to date, despite an 8% rise in the S&P 500. Holding in hopes of seeing CEO Tim Cook and his team make good on long-promised innovations in delivering televised entertainment has cost me dearly.
Bullish investors will nevertheless tell you that Apple Inc. (NASDAQ:AAPL) stock looks like a bargain at current prices. They’re right. Google Inc (NASDAQ:GOOG) and Microsoft Corporation (NASDAQ:MSFT) both trade at a noticeable premium to Apple Inc. (NASDAQ:AAPL) when you factor in liquid assets:
AAPL Price to Earnings Less Cash TTM data by YCharts.
Selling now would amount to declaring that the Mac maker is incapable of generating even 10% annual earnings growth for the foreseeable future. Analysts are modeling for 18.9% annual gains over the next five years, according to Yahoo! Finance.
A decade of investing has taught me that winning is less a matter of wits and more a matter of willpower. Apple Inc. (NASDAQ:AAPL) is testing my will to hold, so I shall.
What’s the Big Idea this week?
Elsewhere, Google and Riverbed Technology, Inc. (NASDAQ:RVBD) barely budged as my other two tech holdings plunged, costing me another 420 basis points in my three-year battle with Mr. Market. Among the indexes, only the Dow reported a marginal 0.19% gain.
This time, the Russell 2000 led the laggards with a 2.72% decline, followed by the Nasdaq’s 1.30% drop, and the S&P 500’s 0.59% dip, according to data supplied by The Wall Street Journal. Here’s a closer look at where I stood through Thursday’s close:
| Company | Starting Price* | Recent Price | Total Return |
| Apple | $416.26** | $427.72 | 2.8% |
| $650.09 | $795.07 | 22.3% | |
| Rackspace Hosting | $41.65 | $46.86 | 12.5% |
| Riverbed Technology | $25.95 | $14.96 | (42.4%) |
| Salesforce.com | $100.93 | $166.41 | 64.9% |
| AVERAGE RETURN | — | — | 12.02% |
| S&P 500 SPDR | $124.39** | $155.86 | 25.29% |
| DIFFERENCE | — | — | (13.27%) |
Source: Yahoo! Finance.
*Tracking began at market close on Jan. 6, 2012.
**Adjusted for dividends and other returns of capital.
Notable newsmakers
Among the other tech stocks making news last week:
Facebook Inc (NASDAQ:FB) took its fight with Google to next level by introducing “Home,” an overlay for Android phones that assumes control of a handset’s home and lock screen. An accompanying “cover feed” reveals what friends are up to while making chat accessible from any app or screen.
