Be Greedy When Others are Fearful
We have all heard the famous saying from Warren Buffett. No matter how much the bears try and tell us not to buy right now, the prices are getting too outrageous to ignore. Stocks are forming a bottom whether bears want to believe it or not. Over the past six months, the S&P 500 has returned 0.86%. If you ask me, that is a lot of trading in a range, especially compared to the 17% the index has lost in 2022. Could stocks go down more? Of course! But many on Wall Street firmly believe that the worst is over and that the market is taking steps to heal itself.
This doesn’t mean the bull market is going to start again. Chances are the market needs a year or more to recover from the shock of the bear market we just experienced. If there were ever a time to be greedy when others are fearful, it’s now. Anything you buy now has a chance to be a bargain when we look back five or ten years from now. Here are two stocks we need to start being greedy for.
Taiwan Semiconductor Manufacturing Company (NYSE: TSM)
Most investors do not realize how important this company is to the world. Nearly every piece of technology uses some form of microchip these days. In fact, the devices we use and rely on each day need multiple different chips to operate. Computers, mobile phones, data centers, and even our vehicles. Semiconductors are the life force that drives technology in our world today.
So why Taiwan Semiconductor? It is the world’s most valuable semiconductor company and creates chips for companies like Apple (NASDAQ: AAPL), AMD (NASDAQ: AMD), Broadcom (NASDAQ: AVGO), Marvell (NASDAQ: MRVL), and NVIDIA (NASDAQ: NVDA). The company recently announced it is investing up to $40 billion to build two fabrication facilities in Arizona. Oh, and by the way, Apple announced it is moving its chip production from China to those facilities in Arizona. Warren Buffet himself disclosed a $4.1 billion new stake in TSMC, and it’s time we recognize it as one of the most important companies in the world today.
Block (NYSE: SQ)
Some might say this is an odd pick for a stock to be bullish on. While we can all agree Block probably flew a little too close to the sun when the stock surged to nearly $300 per share during the COVID-19 pandemic. But shares have fallen by 65% over the past year despite the company continuing to grow.
Block gets a bad reputation because it holds about $150 million in Bitcoin on its balance sheet. Given the negative connotation surrounding crypto right now, I can understand why some people might be skeptical of Block. Say what you will about Bitcoin but Block continues to show excellent growth and is challenging PayPal as the largest digital payments service in the United States. Like many growth stocks, Block is trading at a near-value-stock like multiples. Its price-to-sales multiple sits at 2.04, and its forward-looking PE Ratio sits at just 39, its lowest such figure in years. When the negativity surrounding crypto wanes and interest rates come back down to Earth, I expect Block’s stock to surge once again.
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