Chip stocks falling but still valuable
Everyone seems to be in agreement that chip stocks will regain in value, but nobody wants to catch the falling knife i.e. buying while the price is still falling.
One predicted bottom I’ve heard for many industries is the prepandemic price. As the world shut down, the entire world faced an unprecedented situation, and the market entered a bubble. While there were massive layoffs, there was also free money and free time, and the market soared. The desire to stop inflation also means compensating for the stimulus that was pumped in, and trying to reset everything to pre pandemic levels, and with prices falling, so will earnings and stocks.
Will chips fall all the way before bouncing back? That’s quite a way to go, so I’m picking up a little bit here and there as prices fall with my spare change. I do agree that these can only rise, but they are more valuable than they were at the start of the pandemic. The world is now even more heavily reliant on computers and digital communication. Chips are everywhere - computers, cars, phones, and this is just the beginning. Whatever technology comes next, chances are there will be some sort of chip inside. Invest cautiously but with a view towards the long term.
My current top pick in this sector include $Taiwan Semiconductor(TSM.US$ which Warren Buffet revently invested heavily into. They have brand recognition, proven technology, make profits, low debt, and offer a dividend - all the hallmarks of a Buffet stock to hold gor the long term.
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