Key insights
- The author expresses frustration with their limited understanding of the semiconductor industry despite holding profitable positions in related stocks. They acknowledge a lack of in-depth knowledge regarding technological advancements, industry cycles, and value chain dynamics, leading to a reliance on basic financial metrics. This realization prompts reflection on the importance of Warren Buffett's 'circle of competence' investment philosophy, suggesting a cautious outlook on sectors outside one's expertise, potentially leading to reduced investment in complex tech areas.
I tried my best to understand how HuaWei used chip stacking to achieve better density and save power. But I couldn’t even understand ChatGPT’s summary of ChatGPT’s summary. I also tried to watch a video explaining how CPO works and I couldn’t understand a goddamn thing.
I realized that I am just as dumb as the boomer investors that I made fun of. And it’s not like I completely missed out - I held AEHR and AMD last year and sold too early but still made a profit this year. And I still hold ASMl and NVDA till today, and added APH recently and it’s already up 20%. But I feel like I am clueless as I only owned those names because 1) they had good fundamentals / business profile 2) they were cheap. But I didn’t know shit about the actual industry, what part of the cycle it is, what is the technology like, what is the bottleneck, what is the shortage, and what drives demand for each part of the value chain. I knew the broader series industry was in a recession in 2025 but didn’t understand deep enough to know what recovery really looks like. Instead of having a good understanding of the industry, I got too focused on shit like: topline growth/margin expansion/buybacks etc.
I kinda understand why Warren Buffet doesn’t own what he doesn’t own now. The circle of competence thing is real. I hate my dumb brain.