Monday, Mar 28th 2022
In the Offshore portfolio, we’ve reduced our stake in Cameco Corp. (CCJ), Taiwan Semiconductor (TSM) and Sea Limited (SE) in an effort to manage risk, and shore up more cash to deploy into high-quality businesses once macro concerns have eased.
Cameco Corporation (CCJ): We’ve trimmed Cameco Corporation (CCJ), the second largest uranium producer in the world, for clients in the Offshore portfolio. With CCJ up ~20% year-to-date, it organically grew to be more than 10% of the portfolio prior to our trim. Although we’re big believers in making concentrated bets, a position larger than 10% can become a serious risk if conditions in the market change abruptly, and we’re happy to take some gains here.
The Russian invasion of Ukraine and the resulting price spikes in crude oil, natural gas, and coal have reminded governments across the world about the importance of energy independence, and our thesis on uranium and nuclear power continues to track.
Taiwan Semiconductor (TSM): TSM’s chips power technologies that range from smartphones and tablets to electric vehicles and server farms. We expect the demand for chips to increase for decades to come, and TSM is the ultimate “pick and shovels” play on this secular trend, in our eyes.
Our thesis has been playing out well since initiating a position in November, but this trim was made to manage higher geo-political risks following Russia’s invasion of Ukraine, an event that highlights simmering tensions between China and Taiwan.
Sea Limited (SE): Since reaching all-time-highs in October 2021, the selling pressure has been persistent in Singapore-based gaming and e-commerce giant Sea Limited. Already a small position in the Offshore portfolio, we’ve further reduced our stake in SE due to uncertainties in their global expansion plans, particularly in light of recent news the company will be shutting down its e-commerce business in India.
Please let us know if you have any questions about these moves, and thank you as always for the opportunity to manage your capital.
Onwards, Titan Investment Team
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