Another week of panic on Wall Street and a 0.25% interest rate increase… There has be something more interesting?… There is!
Buffett the trader: Dumps Taiwan Semiconductor stock after 3 months
Blockbuster website: Back online “we are working on rewinding your movie.“
Crypto’s crossroads: Regulation, Fear, and Crypto Market Surges
Hand picked: $55k iPhone, Wealth taxes, and a conversation with a great investor
THE DOSSIER
Buffett’s Semi-Plunge
When Warren Buffett dips his toes into tech, people pay attention. The investment mogul is renowned for his value investing strategy, focusing on underpriced stocks that consistently reward shareholders through dividends or buybacks. And he has said that his favorite holding period is ‘forever.’
So, when Buffett made a surprising move into Taiwan Semiconductor (TSM) last year, people couldn’t help but wonder what was happening. Is Buffett going in big on semis?
Despite being a relatively minor $4 billion purchase compared to the roughly $150 billion cash that Berkshire is sitting on, it was out of the ordinary, especially with the tension between Taiwan and China.
The market quickly turned and decided Buffett was onto something, and the stock rallied over 25% in a week.
But here’s the twist – Buffett sold 85% of his TSM holdings the next quarter. So it begs the question: what was his goal?
While Buffett didn’t openly discuss his thoughts on this trade, so we can only speculate.
My take on Buffett’s TSM purchase is that he intended to purchase and hold the stock and possibly purchase more. He’s well-known for purchasing more stock if the stocks become cheaper. TSM fits well into his portfolio. The company has steady growth, pays a small dividend, and has strong leadership. Something geopolitical must have tipped him off.
A quick glance at the price and volume profile over that period shows that his average purchase price was around $76, and his selling price was approximately $82. At the end of 2022, he still had around 8.29 million shares remaining (roughly $600M). Selling the other 85% at a small profit would leave him with a lower cost basis per share of around $45. (excluding any taxes that would be owed on the short-term profit)
This unusual decision and subsequent sell-off of TSM shares left many scratching their heads. It will be interesting to see what he does with the remaining TSM shares in the future.
BRAIN FOOD
Crypto Turmoil: Hindenburg’s hit piece on Block adds fuel to the fire amid crackdown
Buffett to Banks: you can’t keep calling me every time you need a bailout, but okay this time
Return of the King: Blockbuster Video’s website suddenly resurrects after years of absence
Making Waves in Tech: data centers turn to swimming pools for eco-friendly cooling solutions
ChatGPT: Your New Colleague? AI assistant set to replace some workers and change the game
COINCIDENCE?
Crypto has been making headlines for the last 2 years, starting with the price of Bitcoin peaking at $69,000, followed by significant collapses of Terra Luna ($40 billion), Three Arrows Capital ($10 billion), Celsius ($4.2 billion), FTX ($30+ billion).
Investors assumed that was the end of the collapse and the dust had settled. But has it?
Last week, Balaji Srinivasan, a successful entrepreneur, a crypto advocate, and the former CTO of Coinbase, began advocating purchasing Bitcoin in the wake of the potential banking crisis. Citing the possibility of rampant inflation and price discover of $1 million per Bitcoin within 3 months time. He labeled this the Bit Signal, offering over $1 million to those that spread the word. (💀that’s not what this is)
March 16, 2023:
The question has to be asked. Are these recent events a coincidence or a concerted attack to eliminate cryptocurrency?
Here are the facts:
March 3, 2023: Silvergate Captial (SI) “winding down” operations. Wiping out it’s crypto arm.
March 12, 2023: Signature Bank (SBNY) was shut down by regulators after large sums were withdrawn, collapsing the bank.
March 22, 2023: Coinbase (COIN) (the largest US crypto exchange) receives a Wells Notice. This is a letter from the Securities and Exchange Commission notifying them that regulators intend to bring charges against the publicly traded company.
March 23, 2023: Hindenburg Research, an investment research firm that has a bias toward short-selling released a hit piece article targeting Block, Inc. (SQ) the largest financial tech platform that allows cryptocurrency transaction.
March 23, 2023: Do Kwon, the founder of failed project Terra Luna, was arrested in Montenegro after almost a year of being on the run.
The timing of these events in the midst of a potential banking crisis seems quite impeccable. Time will tell how it unfolds. It will be interesting to say the least.
HAND-PICKED
📻 Tune-in: Tim Ferris interviews one of the smartest tech investors – Bill Gurley
đźš©Yikes: Capital gains tax to 39.6%?!
📱1st Edition iPhone: Sells for $55k at auction.
ENJOY
Vegan Meat Magic: A Mouthwatering Fake Steak – AI Steak
