Taiwan Semiconductor Stock Forecast: TSM slides on shocking Warren Buffet reversal

Taiwan Semiconductor's $台積電 (TSM.US)$ stock price drooped 6% to $92 in Wednesday's premarket after disciples of Warren Buffet were spooked by the Oracle of Omaha's sudden scrapping of his position. A 13F filing with the Securities & Exchange Commission (SEC) shows that Buffet's Berkshire Hathaway sold off about 86% of his $5 billion position during the fourth quarter.

“It’s surprising that Berkshire cut its holding so much in just a quarter, which differs from its past practice of long-term investment and continuing to add shares,” said Tony Huang, vice president at Taishin Securities Investment Advisory, in an interview with Bloomberg.

TSM shares – trading in the low-$60s when Warren Buffet's investment was announced last November – did advance about 50% in value since the investment, so maybe Buffet just seized on a decent swing trade. However, more than half of that 50% came amid January's rally, so Berkshire would not have benefited.