Never invest in a business you do not understand. Warren Buffett’s advice from 30 years ago still guides many investors. Yet the same advice meant that the Sage of Omaha missed out on the early gains of companies like Google and Amazon. He has not left it too late to benefit from Taiwan Semiconductor Manufacturing Co.
The Taiwanese chipmaker ranks as one of the biggest Asian tech investments ever made by Buffett’s Berkshire Hathaway. It took a stake of more than $5bn in TSMC during the three months ended in September, according to filings.
Berkshire’s holding is way behind its stake in Apple. The latter is worth around $130bn and accounts for more than 40 per cent of the equity portfolio. That level of conviction in the devices maker should have spurred Berkshire to invest sooner in TSMC. The company makes most of the advanced chips for Apple’s products, ranging from phones to computers.