What's Warren Buffett Buying

The market got a surprise a couple of weeks ago when Buffet disclosed he'd dropped $4.1B into TSMC in the middle of the crisis over Taiwan. What other interesting things has he been buying?

Betting on tech?

The Oracle of Omaha attracts much interest among traders, and the mere fact that Berkshire Hathaway takes a position in a company is enough to boost the stock. But that doesn't mean every one of his forays has been successful; the investment into airlines right ahead of the pandemic ranks as one of the bigger stumbles the erstwhile successful investor has made. Here are a couple of interesting findings from the quarterly disclosure of his holdings:

Apple, 41% of the portfolio

Most financial advisers suggest having a diverse portfolio, but since buying shares in Apple, Buffet has accumulated over $122B in tech company shares, which amounts to just under 6% of Apple's total market cap. However, Apple has been among the worst performers of the tech companies to have during the recent route. Of course, the other side is that it won't experience as much rebound.

Activision Blizzard, 1.8% of the portfolio

Aside from the recent foray into semiconductors, Buffet has a series of investments in other tech firms that bring around half of his portfolio exposed to the often volatile and high-valuation tech sector. Activision is one of the exceptions in this space, with a P/E of "just"; 35, but it has managed to generate a gain in the share price throughout the year.

Hewlett Packard, 1.1% of the portfolio

Another stock related to the tech sector with a low P/E ratio, this time in the single digits. It fits with Buffet's mantra of buying undervalued companies, though he's been a holder for quite some time. HP did lose out during the tech slump this year but was also one of the least worst performers like Apple.

TSMC's biggest loser in Buffett's portfolio

From a technical perspective, TSMC's year-to-date losses are the largest among the four stocks in Buffett's portfolio, down 31.44%. On the other hand, Activision Blizzard is up 12.73%, second to HP's 6.44% advance. APPLE is also down -16.48%, but it trades sideways.

TSMC completed a falling wedge at $59.00 (S3) in October and has since marched towards $92.00 (R2), the typical swing hit after reversals. With short-term support and resistance at $79.00 (S1) and $85.00 (R1), prices might get stuck before clearing the path towards a certain direction. If the swing peak breaks, it will open the door to $110.00 (R3), whereas failing to hold $74.00 (S2) might expose the record low of $59.00 again.

Key takeaways

Buffet's recent investment into TSMC has surprised many, and his overall exposure to the tech sector is significant. However, Apple and HP have been among the least worst performers in the tech rout this year. From a technical perspective, TSMC looks like it may be poised for a rebound in the near future.