One of the most famous investors of all time surprised the markets with an unexpected expansion of his portfolio when his company Berkshire Hathaway announced the purchase of a stake in TSMC in the amount of USD 4.1 billion. This was also reported by the well-known platform Financial Times on Twitter. The huge investment is a reflection of the demand for chips, as TSMC manufactures 90% of the world's smart computer chips and supplies them to tech giants such as Apple and Qualcomm. Immediately after the announcement of the stake purchase, the stock surged about 9%.* Just before that, however, the stock bottomed out after a sell-off of more than $250 billion.
Performance of Taiwan Semiconductor Manufacturing Company Ltd. over 5 years. Source: tradingview.com
A step in a new direction
Many were surprised by this unusual investment on Buffett's part, as his usual investments have not been focused on the technology industry and he himself has always claimed that he does not understand this particular industry. However, years later, he may be rethinking his portfolio allocation, and one of the reasons is that TSMC's stock is down about 28% this year due to the economic downturn.* Another logical reason is that chip manufacturing is essential for many companies as they are used in the production of a large number of products.
Legendary investor
Buffett is now 92 years old but started investing at the age of 11. He is a great inspiration to investors not only in the US but also around the world and some of his most famous investments include companies such as Apple and Coca-Cola. As of August 29, his fortune has reached an incredible $100.2 billion. He is currently the seventh richest person in the world. His strategy is based on investing in businesses that are undervalued but have long-term economic value after deducting all costs, not just those that are considered accounting costs.
* Past performance is no guarantee of future results.
