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Technology > Tech Biz
Genius or jerk?
I've picked some tech winners (Apple) but some calls (disk drives?) made me look like a doofus.
July 2, 2004: 12:39 PM EDT
By Paul R. La Monica, CNN/Money senior writer

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NEW YORK (CNN/Money) - The first half of the year is over and you know what that means. It is time to look back and see how this column's stock picks have fared.

Gulp! I always approach these report card columns with a sense of dread since I know that I'll have to flog myself for some awful stock calls. Fortunately, there are some successes to celebrate as well.

So without any further delay, let's check-ch-check-check-check-ch-check it out. (Really digging the new Beastie Boys album!)

We'll start with a sector call I made at the end of last year. I predicted that chip stocks would cool off, even though earnings would be strong, simply because most of 2004's good news was already baked into the stocks: the Philadelphia Semiconductor index soared 76 percent in 2003.

For that column, I get a gold star. So far this year, the SOX is down 8 percent.

But my first column of the year is one I would like to forget. I sang the praises of disk drive companies Seagate, Western Digital and Maxtor because I thought that they had finally learned how damaging the price wars in this industry were. Plus, the stocks all seemed to be bargains.

Wrong! They were "cheap" for a reason. These companies continue to face tough pricing pressures, which have resulted in several earnings warnings. As such, Seagate (STX: Research, Estimates) has sunk 27.9 percent, Western Digital (WDC: Research, Estimates) has fallen 30.6 percent and Maxtor (MXO: Research, Estimates) has plunged 44.4 percent. Gadzooks! Time to put on the hair shirt for this one.

Chips & disks slip, towers rise
Abandon chip?
Easy money for hard drives
Towers of power

Once I stopped knocking my head against a wall for that terrible call, I started to smile because a bullish column on cell phone tower companies has turned out much better.

I said investors in cell phone tower companies shouldn't panic about wireless mergers since consolidation wouldn't have a major negative impact on fundamentals. And since then, SpectraSite (SSI: Research, Estimates) has shot up 18.4 percent, Crown Castle (CCI: Research, Estimates) has soared 20 percent and American Tower (AMT: Research, Estimates) has surged 36.4 percent.

Media mistakes...telecom triumphs

But I've had some mixed results looking at media stocks. I said that valuations for satellite radio stocks were in the stratosphere and needed to crash and burn. Stupid! Sirius Satellite Radio (SIRI: Research, Estimates) is up another 7.5 percent since my early February column while XM Satellite Radio (XMSR: Research, Estimates) is up more than 15 percent. Never underestimate momentum.

I then professed my love for big cable stocks Comcast (CMCSA: Research, Estimates) and Cox (COX: Research, Estimates)...the day before Comcast launched its surprise bid for Disney...only to watch them fall 16 percent and Cox down 18 percent. Grrr. But speaking of Disney, that's one media stock call I've gotten right so far.

Mixed results
Satellite radio ga-ga
Don't pull the plug on cable
Mouse trap?
Qualcomm grows up
Dawn of the dead telecoms

I said that Michael Eisner's abdication of the chairman role at the House of Mouse in March did not change much for Disney (DIS: Research, Estimates) and that investors shouldn't get fooled into thinking the stock was a value. Shares of Disney have fallen about 6 percent since.

A pair of telecom-related picks in late March has also panned out nicely. Wireless chipset manufacturer Qualcomm (QCOM: Research, Estimates) is up nearly 20 percent since I wrote that there still appeared to be more upside ahead for the Mighty Q. Sweet.

My advice to run away from the Dawn of the Dead telecoms, companies that recently emerged from bankruptcy and saw their stocks rise for no good reason, has also been a nice, pardon the pun, call. Shares of Global Crossing (GLBCE: Research, Estimates) are down 13 percent, XO Communications (XOCM: Research, Estimates) have fallen 20 percent and MCI (MCIA: Research, Estimates) is down 27 percent.

Stormy April but May's picks shine

But April was the cruelest month for me. Three positive profiles have yet to pan out. (That'll teach me for betraying my usual skeptical ways and getting bullish.)

April showers & May flowers
Last-minute tax (stock) tip
The truth about Veritas
Don't fear this Monster
Games people play
Mac attack
Beware the penguins

Just before taxes were due, I wrote about how TurboTax software maker Intuit (INTU: Research, Estimates) has historically rallied following April 15. But so far, it's down 14 percent. Veritas Software (VRTS: Research, Estimates) has fallen another 5 percent since I said that investors overreacted to some bad news.

And Monster Worldwide's performance has been frightening lately. Despite several months of job growth -- which I said should boost this stock -- Monster (MNST: Research, Estimates) is down 14 percent. Ouch.

However, some of my more recent stock picks look promising. Video game stocks have continued to climb since my mid-May column about the sector. Take-Two (TTWO: Research, Estimates) is up 4 percent, industry leaders EA (ERTS: Research, Estimates) and Activision (ATVI: Research, Estimates) are up 6 percent and THQ (THQI: Research, Estimates) has gained 12 percent.

Tech Biz
Tech stocks
By Paul R. La Monica

Apple (AAPL: Research, Estimates) has shot up another 21 percent since I suggested in mid-May that the stock had more room to run. And a valuation call about Linux stocks in late May was on the money. Red Hat (RHAT: Research, Estimates) has fallen more than 12 percent while Novell (NOVL: Research, Estimates) has fallen 19 percent.

And that's that. There are some calls I regret but several have done well, which is encouraging since most techs have flat-lined this year. I'll take another gander at these picks (as well as ones from future columns) at the end of the year. Here's to a profitable second half of 2004.

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