On Tuesday, 3 major indexes retreated, but 2 of my most favourite stocks were on record high. They are GOOG and TSM. Already said year 2026 is a year of individual stocks rising rather than the whole market. Recently, DJIA and S&P were on record high, but most popular stocks in the market like TSLA and NVDA still away from record high. Practically, they are not so low and had no great falling, but investors had too much high hopes on them and thus seemed waited so long and they still do not rise. I have been talking so much on TSLA, NVDA and GOOG, and now is the time to talk about TSM.
TSM is not just a stock, it is known as Silicon shield of Taiwan. It occupies 90% of the advance process of semiconductor in the world. There is a bipartisan consensus in the United States to protect Taiwan, just see how the sitting president carrying out. So, when TSM is on record high, the chance of being attacked is lowered. TSMC has 16 factories and 5 fabs in the island of Taiwan, if they are being attacked, the supply of chips will be in a disastrous result. You may say other countries should have enough inventory, but at most 3 to 6 months. The alarm would not sound out by the end of the 3rd or 6th month; it will sound out several weeks or even several days of the war.
India has a population of nearly 1.5 billion, and China 1.4 billion, altogether 2.9 billion still cannot generate an enterprise among the top 10 capitalization of the world, but TSM today ranks 6th in the top 10. The population in Taiwan is just 23 million. If either of them can generate another factory to replace TSMC, it will be another story. US does not want China to occupy TSM, it will be a nightmare to them; the whole western world will stand up to protect their semiconductor supply from TSM. Donald Trump has no interest to protect the democracy, freedom and human right of Taiwan, what he really wants to protect is the supply from TSMC. He is a merchant, a CEO of US Co., LTD, rather than president of the United Sates.
What happens if TSM fell to the bottom? Or the supply and importance is replaced by another factory on the earth. It is very hard to say. China always says Taiwan should belong to them and just see what kind of action they will take, either military or psychological penetration to ask them to surrender freely.
Just see the situation in Iran, Venezuela and Gaza, there are great differences. The domestic US response is not the same. The Venezuela capture made some leftard (white left, Champagne socialist or Caviar left) angry, but no one would stand out and sing Do you hear the people sing, singing a song of angry men. But Gaza aroused demonstration among US campuses. This time they were penetrated by white left. Trump is blamed of not abiding to international law, and thus will accelerate the advent of World War III. But if the League of Nation and United Nations are unable to carry out the job of international police, would it stop or accelerate World War III? UN had no power to act as international police; no one will listen to them. They are unable to press down the spread of Covid-19 and unable to find out the source no matter it is from Europe, America or Asia. That’s why Trump withdrew from WHO, but he could not establish another new WHO, for the old WHO had 140 branches around the world and it will take at least 5-10 years to replace this network, to replace the whole UN seemed impossible.
Darwin Doctrine is jungle law and stated whose fist is bigger, who is the king. If we apply this we will go back to primitive forest and no more modern culture. Monroe Doctrine is not applicable in a world of globalization, Donroe Doctrine is coming, no matter you like it or not. It’s a combination of Donald and Monroe Doctrine. What will come next, we better leave it for Think Tanks to evaluate. Investors should grasp chance to make money rather than saying whose right or wrong. Whether Donroe Doctrine would accelerate or press down World War III, it is too far a task for retail investors to think about and we have no power or no chance to correct or push it.
Anyway, the problem of TSM would not come shortly, for Operation Southern Spear proved there is great setback in Chinese weapons, it may take some time for them to improve it before they have actual power or ready to attack Taiwan by the end of 2027. Warren Buffet met his Waterloo in Q3 2022 by buying TSM, and sold in Q4 2022 and Q1 2023. But he is on the Napoleon side of Waterloo, you can be on the Wellington side of Waterloo if you buy TSM, of course not on record high. Do you still remember what happened in Q3 2022? The meteoroid Shower of Orion made the US stock market rose till now. The Inauguration Day of Donald Trump on January 20th 2025 is followed by Six Planet alignment in the solar system, which denotes a new era is coming and you can see so many news in the past year made by Trump and will be more in 2026.