05/05/2026
For Portfolio IV
Taiwan Semiconductor Manufacturing Company Limited (TSM).
Close the TSM's PUT option position.
Apparently, it is a mistake to establish a position of PUT option for TSM now.
On a second thought/review, it is a mistake to have a position of PUT option for TSM this early. The strategy is sound but the time to have a PUT option is totally wrong. The original idea is to mitigate the geopolitical risk of military conflict between China and Taiwan. Due to the high probability, the facilities of TMS in Taiwan will be primary targets if conflict occurs. Why will TSM's facilities be primary targets? First, ICs are used in many weaponries nowadays. Furthermore, targeting TSMC's facilities will not only destroy the revenue for Taiwan but also its whole technology ecosystem within and disrupts the global supply of ICs. From the pandemic experience, global economic was suffered on product disruption due to shortage of ICs.
However, the time to place such protection is not matured yet. From the point of cost-effect, it is inefficient to pay for such premium now; therefore, closing the PUT position is preferred.
Again, concentration investing involves higher risk of significant loss without the protection of diversity.
Each individual investor should always consider their own investment goal, risk tolerance, investing span and objectives for their investment positions. Investing in securities involved the risk of total losses. Investors should always consult with financial professionals.
04/10/2026
For Portfolio IV
Increase the position of TSMC to 10% of the Portfolio, also purchase PUT option to protect the potential down side risk.
AI competition and continuously daily demand for IC
The decision to increase the position is due to on going of AI competition. No matter whose chips are used for computing, manufacturing of IC is in a better position for investing in AI. However, Geopolitical risk is still a major factor for TSMC. It is a better development that company is expanding footprints outside of Taiwan, and countries are inviting their expansion. Purchasing long PUT option can be utilized to protect investing position for TSMC.
Nonetheless, there is a disadvantage for put option, the option price. The two-year long option price for TSMC will cost more than $100 per 1/100 contract (a contract equal to 100 shares) and option is traded per contract. Another way is to purchase shorter period of put option which is cheaper but require more rollovers of the put position. Should be aware is there is a huge cost to utilize option for risk protection. In this case, it is about 17%-24% of TSMC position.
Again, concentration investing involves higher risk of significant loss without the protection of diversity.
Each individual investor should always consider their own investment goal, risk tolerance, investing span and objectives for their investment positions. Investing in securities involved the risk of total losses. Investors should always consult with financial professionals.
02/24/2026
For Portfolio IV
Taiwan Semiconductor Manufacturing Company Limited (TSM)
Initial an investment position of 2% of the Portfolio for TSM
Global expansion and AI competition
Taiwan Semiconductor Manufacturing Company has become household name and it is a rare scene for an OEM. Previously decision to close the TSMC position is a mistake. TSMC should had been kept in portfolio as long as they continues to dominate the manufacturing landscape.
In an estimate, Intel Inc is still 2-4 years behind TSMC, but current CEO, Lip-Bu Tan, is an experienced executive who has helped companies turning around. It is unfortunate that his previous decision to split up Intel's IC manufacturing division from the company got reversed. Indeed, Intel has a lots to do in order to catch up TSMC in technologies, management and culture.
Geopolitical risk is still a major factor for TSMC. It is nice to see that company is expanding footprints outside of Taiwan, and countries are inviting the expansion. It is necessary for TSMC and international communities in different continent to host TSMC in order to secure the supply of IC production in their region. In a guess, China is more likely than not to destroy the manufacturing facilities in Taiwan in order to disrupt IC supply chain if invasion happens. Spreading manufacturing capacity globally is a necessity for TSMC and other nations.
In AI competition, it does not matter who win the race TSMC will always be the winner, as who make shovels for the gold rush.
Again, concentration investing involves higher risk of significant loss without the protection of diversity.
Each individual investor should always consider their own investment goal, risk tolerance, investing span and objectives for their investment positions. Investing in securities involved the risk of total losses. Investors should always consult with financial professionals.
03/13/2023
For Portfolio III
Position close, cash preservation
Taiwan Semiconductor Manufacturing (TSM)
Close the position of TSM of Portfolio III
TSM: Due to the reasons 1). Future revenue growth will be lower; 2). The profit margin will be squeezed due to the higher expense of operation at Arizona facilities; 3). Politic and geographical conflict risk have increased significantly. It is almost certain China will attack Taiwan to fulfill its long time ambition if China decides to support Russia's invasion of Ukraine with weapons fully.
Again, concentration investing involves higher risk of significant loss without the protection of diversity.
Each individual investor should always consider their own investment goal, risk tolerance, investing span and objectives for their investment positions. Investing in securities involved the risk of total losses. Investors should always consult with financial professionals.
12/28/2019 - Taiwan Semiconductor Manufacturing
05/07/2018 - Taiwan Semiconductor Manufacturing
Initiation of an investment in the world class semiconductor manufacturer, (TSM).