Three Serious Problems Owning Taiwan Semiconductor

Core Insights - The investment strategy focuses on acquiring strong businesses at undervalued prices, emphasizing the importance of quality and economic fundamentals [1] Investment Focus - The company has diversified its portfolio across various industries, including telecom, banking, payments, and technology, with a current emphasis on high-quality businesses [1] - There is a particular interest in big tech companies that have extensive user bases and content libraries, highlighting the potential for cross-selling opportunities [1] Valuation Approach - The preferred valuation method is at the EBIT plus R&D level, reflecting a belief in the potential of certain R&D investments [1] Performance Metrics - The annual return from February 2019 to October 2024 is reported at 11.4% CAGR, which is below the market's 15.18% CAGR, indicating a need for improved performance [1] - The investment philosophy aims to minimize portfolio turnover, suggesting that most profits will come from holding existing investments rather than frequent trading [1] Investment Philosophy - The company does not endorse traditional "Buy" and "Sell" recommendations, instead advocating for a "Strong Buy" threshold for exceptional businesses, with everything else categorized as "Strong Sell" to free up capital for new opportunities [1] - A "Hold" position may be initiated for high-quality businesses if their pricing is not favorable [1]