On April 27 I decided to hold onto shares of Taiwan Semiconductor Manufacturing (TSM) for a little longer. I thought the risk was relatively small and the upside to my target of 17% provided enough reward.
Well, the world looks significantly different two weeks later. Risk has gone up and the reward for investing in Taiwan Semiconductor has gone down. The Taiwanese stock market has shown itself very susceptible to anything that roils China’s markets and I think the direction of China’s stock market still points down for another few months at least and the volatility of all emerging markets is on the rise.
I’ve got another reason for selling too.
As I noted in my post https://jubakpicks.com/2010/05/07/good-news-from-the-u-s-jobs-number-although-the-stock-market-doesnt-care/ the U.S. economy continues to deliver solid and perhaps improving growth. I’d like to increase Jubak’s Picks’ exposure to that U.S. growth story and selling an overseas stock such as Taiwan Semiconductor and buying a U.S. stock is one way to do that. (I’ll have the U.S. pick later today.) So I’m going to take advantage of today’s bounce, recovery, whatever from yesterday’s huge plunge to sell this position. Jubak Picks is at break even on this stock since I added it to the portfolio on October 20, 2009.
Full disclosure: I own shares of Taiwan Semiconductor Manufacturing in my personal portfolio. I will sell that position three days after this is posted.
TSMC: 2010 capex may exceed forecast $4.8 bln
http://www.reuters.com/article/idCNTPV00168320100624?rpc=44
TSMC’s Chip Sales in April Hit All-Time High
http://www.nytimes.com/external/idg/2010/05/10/10idg-tsmcs-chip-sales-in-april-hit-all-time-high-54450.html
* – TSMC is considered a bellwether for the tech industry due to the wide range of chips it manufactures, which end up in products including iPads, PCs and mobile phones.
* – The global chip industry has been stronger than most analysts expected so far this year – iSuppli said the chip industry is set for its highest annual growth in a decade this year; The last time chip sales expanded at such a pace was in 2000, when sales grew at a 36.7 percent clip.
nsrende, as do too many others, in too many other Comments sections or forums, rather than denigrate Jim, simply post your own Long Term equity picks, buy them after you have posted them and sell them after you have notified us of a Sell rating. Have you an equity picking blog yet with the record that Jim has? Not trying to denigrate you nsrende, just asking for the negativity to end.
Run26.2 and dan:
Well said in your responses to nsrende.
I dunno Jim… you might have been right originally… S&P seems to think so:
S&P MAINTAINS BUY OPINION ON ADSS OF TAIWAN SEMICONDUCTOR MFG
(Standard & Poor’s)
Following TSM’s strong report of Q1 results, we are raising our 2010 earnings per ADS estimate by $0.19 to $0.83, and we are introducing our 2011 estimate of $0.86. This reflects our view that the company’s earnings growth will decelerate in coming years, as higher shipment advances will be partially offset by lower wafer prices. We maintain our 12-month target price of $13, based on a blend of our P/E and price-to-book analysis. Our buy opinion reflects our belief that valuation remains attractive, despite anticipated slowing growth.
nsrende, Jim’s strategy is mainly a buy and hold (but observe carefully), the day to day or month to month fluctuations are for day traders floating condors and butterflies or shorting every burning house they can find. Jim picks based on fundamentals and rarely touches his picks within a year or less unless something extreme happens. Jim is too humble to talk about his brilliant picks but I have no reservations talking about them. He suggested FSUMF at 1.35, its now at $3.70 (he also suggested selling it if you have a short term time horizon at $4.50). Jim suggested TC when it was trading for under $4, its now over $10, his great picks are countless, POT at $74, VALE at $11, COH in the teens, he has way too many picks that have helped us all weather this storm to nitpick him on one stock. Sorry but I had to stick up for my boy. If you want to be a day trader watch Cramer, if you are in it for the long haul read Jim and Buffet.
nsrende… take Jiim’s picks as suggestions and do your own DD. Many of Jim’s ideas are great and give me stocks to watch. Our timing tends to be different though. Just b/c Jim buys or sells does not mean you must also.
I understand your frustration, but if you only expect winning trades, then perhaps investing in stocks is not for you bro.
Oh Jim. This portfolio has left me feeling like more of a sucker with every losing trade. Though I appreciate the insight, you seem to get caught up in the rising markets too late and fail to consistently take profits if and when picks reach your targets.
Jim,
at least you are buying,, so would that mean that you see good buys, or i should say it time to buy.
In this unprecedented moment of after-shock and – as far as i concern – great shopping discounts opportunities i have one qn to Jim:
What!?
Aha, beat Jim to the punch, after he posted his doubts about TSM a few weeks ago! However I did purchase INTEL and I’d like to know if he still likes Intel after his remarks in the recent Apple article?
ha wish I had set up an agressive stoploss when it was close to 12 bucks :/ sold hehe. picked up blk, brkb and more tc this morning.