In other words, when it comes to technology businesses, "moats are lame." I firmly believe there aren't all that many "deep moat" investments out there in the tech industry. Specifically, when it comes to businesses that require the reinvestment of lots of profit to maintain a long-term advantage over competitors, Munger said he naturally "hates a business like that." As my colleague Billy Duberstein recently noted here, Munger alluded to the semiconductor industry during the Daily Journal annual meeting.
This is precisely why he and Munger tend to shy away from making tech investments. Why in the world would Buffett do that? The answer to that question provides a lesson for all investors. There's a good chance Berkshire Hathaway logged a loss on the short-term flip in this top semiconductor stock. On the contrary, the buying took place during the third quarter of 2022, when the average TSM share price was higher than in the fourth quarter. This was no quick and profitable trade, though. However, it took all of about three months for Buffett and his team to reverse course and promptly sell off most of that brand-new TSM investment.
Thus, it came as only a slight surprise that Warren Buffett's Berkshire Hathaway ( BRK.A -0.12%) ( BRK.B -0.39%) broke with a longtime aversion to technology companies and bought a significant stake in TSM in the third quarter of 2022. The majority of the world's most advanced microchips for smartphones, PCs, and data centers are made by TSM. Taiwan Semiconductor Manufacturing ( TSM -1.83%) is an incredible company and one of the most important businesses on the planet.
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