Core Investment Philosophy - Warren Buffett's investment philosophy emphasizes consistency and long-term value creation rather than short-term hype [1][2] - Buffett rewards patience in investing, focusing on companies that compound over decades rather than those with sporadic strong quarters [2] Characteristics of Preferred Companies - Buffett seeks companies with strong market positions, brand strength, customer loyalty, scale advantages, and predictable cash generation [4] - The companies that Buffett invests in typically offer consistent dividends, indicating management's focus on long-term value [4] Notable Investments - Coca-Cola serves as a prime example of Buffett's investment philosophy, with Berkshire Hathaway never having sold a share since its initial purchase in the late 1980s [6][7] - Berkshire Hathaway invested $4.3 billion in Alphabet during Q3 2025, reflecting Buffett's ongoing search for companies that meet his investment criteria [7] - American Express has been held continuously by Berkshire since 1991, showcasing Buffett's commitment to long-term investments [7]

Core Insights - Costco has a competitive advantage due to its large membership base, which allows for lower prices and contributes significantly to its profits [2][3] - The company reported a 9.3% increase in paid executive memberships year-over-year, totaling 38.7 million, which represents 47.7% of paid members and 74.2% of worldwide sales [3] - Costco's total paid members reached 81 million, up 6.3% from the previous year, with a total of 145.2 million cardholders, reflecting a 6.1% year-over-year increase [3] Membership and Profitability - Membership fees account for approximately 60% of Costco's profits, allowing the company to maintain low margins [2] - Basic Gold membership costs $65 annually, while Executive membership is priced at $130, offering benefits such as 2% cash back and exclusive operating hours [3] Expansion and Sales Performance - In Q4, Costco opened 10 new warehouses, bringing the total to 914 worldwide, with plans to open an additional 35 warehouses in fiscal year '26 [4][5] - Net sales for the fiscal year reached just under $270 billion, marking an increase of over 8% compared to the previous year [5] - E-commerce sales surpassed $19.6 billion, reflecting a growth of over 15% [5] - The company achieved record gas volumes, aided by extended gas station hours and new gas station openings [5]

Core Viewpoint - The article emphasizes the importance of understanding fair valuation in the stock market, particularly for Taiwan Semiconductor Manufacturing (TSM), as it navigates through market volatility and competition [1][3]. Company Overview - Taiwan Semiconductor Manufacturing (TSM) is currently priced at $176.36, with a 52-week range of $125.78 to $226.40 and a dividend yield of 1.22% [2]. - The company holds a significant 59% market share in advanced chip nodes, making it a primary supplier for major clients like Apple and NVIDIA [4]. Financial Performance - TSM has demonstrated strong financial metrics, including gross margins of 56.1% over the past 12 months, indicating robust pricing power [5]. - The company boasts a net income margin of over 40%, contributing to a return on invested capital (ROIC) of 20.3% [7][9]. Growth Potential - Analysts forecast earnings per share (EPS) to grow to $2.65 by Q4 2025, representing an 18.3% growth from the current $2.24 [12]. - Historical P/E valuations suggest that TSM could reach a stock price of $307.4 if it returns to a normalized P/E multiple of 29.0x [13]. Analyst Insights - Barclays analysts have set a price target of $255 for TSM by January 2025, indicating a potential upside of 45.3% from current trading levels [14]. - The overall analyst rating for TSM is a Moderate Buy, although some top-rated analysts suggest alternative stocks may offer better investment opportunities [16].