On Monday, iconic investor Warren Buffett announced that his firm Berkshire Hathaway had purchased a $4.1bn stake in Taiwanese chipmaker TSMC during the last few months. Known to have missed the early wave of investments in tech, passing early on Google and Amazon, Buffett and co. are now — selectively — embracing the industry. A 2016 investment in Apple has worked out spectacularly well, with the iPhone maker now Berkshire’s largest holding, equivalent to a 5.5% stake in the company.
Although notable, the TSMC investment still barely makes a dent in the holding company’s 12-figure outstanding cash pile. Berkshire’s $108bn is an amount that, at current market prices, could theoretically buy Lululemon ($45bn), Snap ($18bn), Dominos Pizza ($18bn), Spotify ($14bn), Peloton ($5bn), Lyft ($4bn) and soccer team Manchester United ($4bn). Or, if Buffett wanted to put all of his eggs in one basket, he could go for PayPal ($102bn), Target ($87bn)... or two-and-a-bit Twitters (which seemingly go for $44bn a piece).
Slow and steady wins the race
After years in which high-growth, expensive, companies have been in vogue, Buffett’s unflashy value investing strategy might begin to identify bargains again, as stock markets have slumped so far this year.
Indeed, after 40+ years of outperforming, Berkshire Hathaway is still winning. Over the last 12-months, shares in BRK are up 10%, whilst the S&P 500 is down 14% over the same time period.