Berkshire Hathaway just made a huge investment in a microchip company in Taiwan.
👉 Background: Warren Buffett is arguably the world’s most famous investor. The company he founded, Berkshire Hathaway, has seen a 20.1% compounded annual gain from 1965 to 2021, compared to 10.5% for the S&P 500 Index.
👉 What happened: Now, Berkshire Hathaway has made a $4.1 billion USD investment in a microchip company called Taiwan Semiconductor Manufacturing Company (or TSMC for short).
👉 What else: TSMC accounts for around 90% of the world’s super advanced computer chips. And it seems like Berkshire has been throwing its bag at stocks lately as it identifies value stocks in the market.
💡Be fearful when others are greedy, and greedy when others are fearful. Berkshire Hathaway is known to buy well-known brands that have strong unit economics... at good prices.
💡Last year, when tech companies saw their valuations soar (and your next door neighbour was suddenly a finance guru), Berkshire Hathaway was not very active in the market by its standards.
💡But this year, with the NASDAQ index dropping more than 28% so far, Berkshire Hathaway has become opportunistic. They’ve snapped up stakes in quality businesses which they considered to be undervalued, like TSMC, Paramount and Occidental Petroleum.
Sign up for Flux and join 100,000 members of the Flux family
