Liz here, fresh out of jail. I took my fiance, who’s in the detention center, some lunch. (He works there, but as I said earlier, I like freaking people out for a hot second.)
Speaking of freaking out, we watched Frankenweenie with Mr. 4 last night. And I can officially tell you that this column has now tainted everything about my life.
As we sat there comforting our terrified child, I kept thinking, “Victor Frankenstein is the only one who can capture lightning and reanimate dead pets, and that means all the other stop-motion kids have to come crawling to him. Gee – Victor Frankenstein is exactly like Taiwan Semiconductor Mfg. Co. Ltd.
(NYSE: TSM.)
TSM – Andrew Keene’s latest big scanner signal – is the world’s leading semiconductor foundry, with all the other chipmakers crawling to it to buy parts that only TSM can build. Lightning in a bottle, if you will!
This is why I can’t have nice things.
This column has ruined my life, but in a good way (like the entire oeuvre of Tim Burton, really).
After Mr. 4 finished screaming in terror, I went down a Tim Burton rabbit hole on the Internet and discovered that, at 24 separate frames per second, it takes a stop-motion animator about a week to get 5 seconds of usable footage.
AK sees 100% gains on TSM in about 2 weeks, which, as you now know, translates to 10 seconds of stop motion. That means you can double your money in about the same amount of time it takes Frankenweenie to chase that weird cat around the backyard. I hate his triangular mouth. It makes me very uncomfortable.
Oh, and by the way, AK’s newest oil patch play from last week is up 58%, so you’ve got that going for you, too.
The Trouble With AK’s Great Stocks Is That A Story Without Gore Is A Little Boring
AK’s trading style is deceptively simple. As you know by now, his ultra-powerful S.C.A.N. system spots unusual options activity, confirms that activity with an indicator called the Ichimoku Cloud, and spits out constant buy signals. That means, while a lot of programming work went into the backend, the scanner itself pretty much runs autonomously now – delivering some of the purest, quickest flex trades I’ve ever seen.
Each one of those instant trades, though, has big money – and big minds – behind it. That means that a S.C.A.N. signal is shorthand for, “Somebody bigger and smarter than I am sees good things about this stock.”
Generally, when I settle in to research a S.C.A.N. stock a little deeper, I’ll find a solid company with good fundamentals and a compelling long- or short-term growth story.
Trades that just make sense.
Like TSM, for instance….
This stock – a $528B Taiwanese company that, thankfully, trades on U.S. exchanges, is right at the sweet spot of the chip shortage. Demand for the $4.2B-per-month semiconductor business – those mysterious little things that power smartphones, cars, gaming consoles, and probably Godzilla – far outpaces supply.
And a current (see what I did there) power shortage in many Chinese factories is ratcheting up the crunch even further.
TSM, again, just like little Victor Frankenstein, holds the magic scientific power at the heart of this industry.
This means that TSM can basically call the shots on pricing (it’s nice to be the only game in town).
They’re in the process of hiking all their prices by the end of the year (Apple component prices will rise 3-5%, while prices for other things may balloon as much as 20%). Nobody minds paying. Everyone is desperate.
TSM plans to plow all that extra cash back into increased growth, with $100 billion going into new factories and production capacity over the next three years.
Not surprisingly, earnings – which will hit in the next day or two – are expected to be a solid beat, with net profit up as much as 9% from this time last year.
The trouble with all this is that it’s a little boring. There’s no conflict. It’s just a straight success story.
For that reason, I’m introducing a wrinkle in the form of Corpse Bride.
She then finds her way into the “clean room” at the heart of one of TSM’s foundries – even a speck of dust in this room can ruin a microcircuit.
She pauses, looks around with her large, creepy eyes, and then disintegrates into dust particles in the middle of the room – halting production for days, even weeks, as workers in hazmat suits struggle to minimize the contamination.
Suicide mission.
Also, a temporary pullback for TSM stock. But the underlying fundamentals are good. They’ll be back.
Your Choice Between Stop Motion or Money Has Arrived
My sense is that you’d probably rather spend the next two weeks making 100% than painstakingly adjusting wire armature by infinitesimal increments.
I’m with you, to be honest.
AK saw this signal cross his scanner – not surprisingly, an “insider” sees good things in this stock and just bought a big block of calls.
>> OptionHacker Signal 1527 TSM 2021-10-22 115 Calls $1.02 OI=886 $111.27 Ref Target #1 $1.53,Target #2 $2.04 (12:56:45 ET) |
This is a nice, cheap call (I always like that about AK). So we’ll classify it as Nickel Slots, no harm done.
Here’s what to do:
NICKEL SLOTS
Action to Take: BUY-to-OPEN TSM October 22, 2021 $115 Calls (TSM211022C00115000) at $0.75 or better. Use a stop loss of $0.35. Enter as a Good-til-Canceled (GTC) order. |
(My own Corpse Bride moment will arrive at 5pm on November 1 – I’m going to try really hard not to think about trading at my own wedding, but like I said, this column has destroyed my life. I’m probably going to be looking at the DJ and thinking of INDEXDJX: .DJI.
I feel like finishing out the Tim Burton version of the TSM story with a heartwarming bittersweet ending, but it’s taking me far too long to type at 24 individual frames per second.
Speaking of extreme slowness, I’ll be back tomorrow (by popular demand) with another Tim Melvin trade. Buy right and hold forever, and eat plenty of steak while you wait.
Hang loose, and happy almost Halloween!
Liz