Apple And Taiwan Semiconductor: Let's Ask Buffett

Nov. 22, 2022 2:03 AM ETApple Inc. (AAPL), TSMBRK.A, BRK.B23 Comments

Summary

  • As a long-time Buffett cultist, I understand (not to say I am able to anticipate) most of his stock choices.
  • But from time to time, some of his choices still come as a surprise and his recent position in Taiwan Semiconductor is a notable example.
  • The choice is even more puzzling when viewed under the context of his largest holding, Apple.
  • There are certainly positives with Taiwan Semiconductor, that is, even when compared to Apple.
  • However, I see these positives easily overshadowed by the developing tension between them, which produces mutual but asymmetric damage.
  • I do much more than just articles at Envision Early Retirement: Members get access to model portfolios, regular updates, a chat room, and more. Learn More »

"Becoming Warren Buffett" World Premiere - Arrivals

Jamie McCarthy

The investment thesis

As a long-time Buffett cultist, I feel comfortable saying that I understand most of his investment choices. But occasionally, the grandmaster still manages to make a move that surprises me such as his recent position in Taiwan

Dataroma.com

Source: Dataroma.com

World Bank data

Source: The World Bank

TSM PE

Source: Seeking Alpha data

R&D

Source: Author

R&D

Source: Author based on Seeking Alpha data

ROCE

Source: Author based on Seeking Alpha data

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This article was written by

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** Disclosure: I am associated with Sensor Unlimited.

** Master of Science, 2004, Stanford University, Stanford, CA 

Department of Management Science and Engineering, with concentration in quantitative investment 

** PhD,  2006, Stanford University, Stanford, CA 

Department of Mechanical Engineering, with concentration in  advanced and renewable energy solutions

** 15 years of investment management experiences 

Since 2006, have been actively analyzing stocks and the overall market, managing various portfolios and accounts and providing investment counseling to many relatives and friends.

** Diverse background and holistic approach 

Combined with Sensor Unlimited, we provide more than 3 decades of hands-on experience in high-tech R&D and consulting, housing market, credit market, and actual portfolio management. We monitor several asset classes for tactical opportunities. Examples include less-covered stocks ideas (such as our past holdings like CRUS and FL), the credit and REIT market, short-term and long-term bond trade opportunities, and gold-silver trade opportunities. 

I also take a holistic view and watch out on aspects (both dangers and opportunities) often neglected – such as tax considerations (always a large chunk of return), fitness with the rest of holdings (no holding is good or bad until it is examined under the context of what we already hold), and allocation across asset classes.

Above all, like many SA readers and writers, I am a curious investor – I look forward to constantly learn, re-learn, and de-learn with this wonderful community.

Disclosure: I/we have a beneficial long position in the shares of AAPL either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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