The predominant company in the vital semiconductor sector, TSMC, has published its third quarter results. Its business performance would give us a clue to the state of the global economy. However, the results were lackluster. TSMC reported an 11% decrease in revenue and a 25% drop in profits (measured in $NT) compared to the previous year. News reports have even called this situation TSMC's most significant profit decline in half a decade, and marking two consecutive quarters of profit decline, a trend not observed in four years. Going beyond the headline figures, I aimed to delve further into the various segments to gain a more detailed understanding of which specific industries are underperforming. TSMC's primary source of revenue is divided into two key segments. As of 3Q23, High Perfor

The US Government is currently actively pursuing legal action against not just one, but two major players in the Big Tech industry. Following its lawsuit against Alphabet, the FTC, in collaboration with 17 states, has initiated legal proceedings against Amazon, citing anti-trust concerns. Here are some of the allegations leveled against Amazon: Undercutting the prices of other sellers with its own products. Penalizing sellers who offer lower prices by relegating their listings lower in search results. Compelling sellers to utilize its warehousing and delivery services. Deceiving numerous consumers into unintentionally subscribing to Amazon Prime. Amazon's share price saw a 4% decline after the lawsuit became publicly known. It's worth noting that the U.S. Government has not had a strong tr

The Federal Reserve chose not to increase interest rates during the latest FOMC meeting, yet the stock market experienced a decline. Some investors might be wondering why, considering that this should be a piece of positive news. We must remember that the market is forward-looking and would price its expectations accordingly, often before the event happens. In this particular instance, the market was not reacting to the current FOMC decision but was instead preparing for future ones. The present pause in interest rates had already been anticipated and factored into the market's calculations. In fact, the futures market for the Fed's interest rates indicated an over 80% probability that rates would remain unchanged, and that prediction proved accurate. But what the market didn't expect was

The lingering apprehension about interest rate hikes never entirely go away. Recently the concerns of a rate hike have escalated, as indicated by the movements in financial markets. Firstly, long-term bond yields have continued their upward trajectory. The yield on the US 10-year bond has climbed from 4.267% to 4.289%, while the 2-year Treasury yield has surged past 5%, reaching 5.022%. This reflects an expectation that interest rates will remain elevated for an extended period. Thirdly, stocks have once again experienced a decline after a brief rebound last week. The declines were not substantial, with the S&P 500 falling by 0.7% and the Nasdaq Composite dropping by 1.1%. It doesn't help when oil prices have been trending up and both major oil exporting countries, Saudi Arabia and Rus

We often hear the stock investing advice of 'buy and hold' as though it is a panacea for all investing problems. Such advice also premised on the assumption that 'stocks go up in the long run'. This can lead investors to mistakenly believe that merely holding onto a stock for an extended period guarantees profitability. However, this is dangerous advice because there are stocks that don't go up in the long run and may caused losses and missed opportunities for an investor. I believe no one wants to take ten years to find out he has lost money. In a research titled 'Long-Term Shareholder Returns: Evidence from 64,000 Global Stocks,' led by Hendrik Bessembinder, an extensive analysis encompassing 64,000 global common stocks spanning from 1991 to 2020 revealed a striking revelation. It was ob

Companies are expected to experience increased interest expenses as interest rates rise. However, this doesn't apply universally. There were companies who took on long-term debts when interest rates were low and currently don't require refinancing. Additionally, some of these companies held substantial cash reserves that benefitted from high interest rates, resulting in the generation of millions of dollars in interest income! Bloomberg ran a piece on this, highlighting a roster of companies that generated interest income exceeding $200 million during the most recent quarter: The Big Tech are rather impressive, with Apple and Alphabet earning nearly $1 billion in interest income. High interest rates didn't affect these companies due to their substantial cash holdings and continuous cash ge

The AI fever has not subsided and it is translating to real dollars for Nvidia. The eagerly awaited results of Nvidia has finally been announced and the results were truly exceptional. Nvidia recorded a revenue of $13.51 billion, marking a 101% increase compared to the previous year. The net profit experienced an even more dramatic surge, skyrocketing to $6.19 billion from $656 million in the previous year, reflecting an astounding 854% growth! This significant margin leap can be attributed to the shift in product composition, wherein data center graphics cards yield a superior gross margin compared to other products. Notably, the surge in demand for data center graphics cards, primarily for AI applications, is the cause of the increase in profitability. Nvidia's gaming division is faring

Starting from March this year, several finance experts have been discussing the unappealing nature of stocks due to the low equity risk premium (ERP). In simple terms, the equity risk premium represents the potential additional return achievable from investing in stocks compared to a safer, risk-free alternative. For instance, when a government bond yields 4% while a stock yields 3%, an investor typically favors bonds due to their higher return and lower risk. The ERP employs the 10-year government bond yield as the risk-free rate and calculates stock yields using the S&P 500's anticipated earnings yield for the next twelve months. Earnings yield is essentially the inverse of the PE ratio. For instance, if the PE ratio is 20, the earnings yield would be 5%. In March, Morgan Stanley rel

China markets are roiled by a property crisis once again. Two years ago it was Evergrande. Now it is Country Garden. Instinctively, we seek to draw from history, searching for comparable instances that could help us understand this issue better. The freshest recollection directs our attention to the US subprime mortgage crisis, which precipitated the 2008 economic downturn. As we were trying to find parallels between these events, we ended up finding dissimilarities. We had trouble recalling prominent real estate developers in the United States. In contrast, there were plenty of big name developers in China, Hong Kong, and even Singapore. Here's the list of ten wealthiest individuals in the real estate industry according to Forbes: Lee Shau Kee (Henderson Land, Hong Kong) Donald Bren (Irvi

Michael Burry gained recognition through his role in the film 'The Big Short,' which chronicles his contrarian and substantial wager on the 2007-08 US housing market collapse. Displaying Big Short Manager Bet ... Consequently, he became a closely watched investor, drawing attention whenever investors seek indications of impending market downturns. According to the recently released 13F filing, he is presently placing another substantial bet on a market decline. Burry, along with his Scion Asset Management fund, invested $886 million in put options against the SPDR S&P 500 ETF Trust and allocated an additional $739 million to put options against the Invesco QQQ Trust ETF. Collectively, the short bet amounts to $1.6 billion, representing a staggering 93% of the fund's total portfolio. Th