Taiwan Semiconductor has the Buffett Put

I’ve been writing about the omni-importance of Taiwan Semiconductor (TSM) since February 2022.

Then, in May 2022 along with other moments, I highlighted when TSM was trading at oversold levels.

A month ago, I pondered that ‘no one is going to blow up Taiwan Semiconductor’

But when the media announced that Warren Buffet’s Berkshire Hathaway had bought an approx $5 billion worth of stock equating to 1% of the company, somewhere during the proceeding quarter being between July 1st and Sept 30th, 2022……..

on Tuesday November 15, 2022, TSM stock (a $400 billion market cap company at that) opened 13% higher than its previous day’s close….

I’m puzzled why did people pay 30% more for a stock which they could have acquired below $62 during any 10 consecutive days only a week earlier?

The chart below shows the period which covered the 3rd fiscal quarter.

Maybe they did so because they either figured they’d be getting into the stock at some sort of similar average price that Berkshire Hathaway may have paid or more plausibly, they don’t need to bother doing any research or work behind the investment themselves because Mr Buffett’s team already did that work for them.

Perhaps the market assumes and concurs that now this company (and country) won’t be attacked or ‘muscled’ for the United States has another economic interest to protect.

Is this now called the Buffett or Berkshire Put?

November 17, 2022

by Rob Zdravevski


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: