What are you buying today?

[Spekulatius]

3 hours ago, sleepydragon said:

you are joking right?

they pick who they want to sell to

I think you don’t understand how this works . ASML develops these machines with  their leading edge customers. They provide them with feedback, what works and what doesn’t and they tweak it together so it works. Without TSMC, ASML would not be able to develop these EUV machines. 
 

Also, ASML makes a lot of money , if not most of their money on lower spec machines where there is competition. So in a way it’s a platform approach.

This “raising  prices by 50%” is way to simplistic and does not account for interdependency and the long term ramifications of such a move.

Edited Wednesday at 03:11 AM by Spekulatius

[formthirteen]

42 minutes ago, treasurehunt said:

ASML seems to be trading at a P/E of almost 60, so they'll have to sell all the machines they can make for a decade or two or three to justify the valuation. Doesn't that require a lot of confidence in the long-term competitive advantages of the business? How are you thinking about it?

 

I bought at around 25 P/E, so I'm not worried about downside right now. I have some worries that the high-end EUV machines are difficult to operate and that manufacturing techniques can be optimized for the old EUV machines. I'll try to exit at the top and switch back to Berkshire, that's the rational thing to do, but the market is not rational right now. Or is it, Berkshire has bought Google instead of their own shares. ASML is a bet on the AI bubble future at this point with downside protection.

[frommi]

How do you know its the top? Speaking of downside protection at a P/E of 60 in a business where sales can easily drop 30%+ is a stretch.

[formthirteen]

30 minutes ago, frommi said:

How do you know its the top? Speaking of downside protection at a P/E of 60 in a business where sales can easily drop 30%+ is a stretch.

 

The loud music stops at the top. That's what I've been told. Join in on the dancing, even Berkshire is. Don't bet the house, only the house money.

[frommi]

4 minutes ago, formthirteen said:

 

The loud music stops at the top. That's what I've been told. Join in on the dancing, even Berkshire is. Don't bet the house, only the house money.

If you hear loud music all the time maybe you should relocate?  

[Lollapalooza]

15 hours ago, Spekulatius said:

I think you don’t understand how this works . ASML develops these machines with  their leading edge customers. They provide them with feedback, what works and what doesn’t and they tweak it together so it works. Without TSMC, ASML would not be able to develop these EUV machines. 
 

Also, ASML makes a lot of money , if not most of their money on lower spec machines where there is competition. So in a way it’s a platform approach.

This “raising  prices by 50%” is way to simplistic and does not account for interdependency and the long term ramifications of such a move.

This is not entirely correct.

ASML doesnt make most of their money on lower spec machines where is competition - actually the opposite, and this is where Cannon/Nikkon make a dent on ASML's business.

 

Actually their most profitable business line on the scanner side is its LowNA EUV machines and DUV immersion.

That said, they sell a bunch of upgrade packages and improvements for customer's installed base, which come with very healthy margins. Naturally DUV (immersion & dry) has a much bigger installed base.

 

Agree that "raising prices by 50%" is totally irrealistic and not a viable/constructive approach for an industry that is so interdependent (sometimes promiscuous); and where 61% of its revenue comes just from a handful of customers. 

[dipod]

Bought a large amount of ABVX common. With the whipsawing market and volatility, feeling less confident with buying long calls.

[sleepydragon]

6 hours ago, dipod said:

Bought a large amount of ABVX common. With the whipsawing market and volatility, feeling less confident with buying long calls.

If buying call, u know they are going to announce safty data by 6/30. That’s a fixed announced date. though options are very expensive now.

[sleepydragon]

7 hours ago, Lollapalooza said:

This is not entirely correct.

ASML doesnt make most of their money on lower spec machines where is competition - actually the opposite, and this is where Cannon/Nikkon make a dent on ASML's business.

 

Actually their most profitable business line on the scanner side is its LowNA EUV machines and DUV immersion.

That said, they sell a bunch of upgrade packages and improvements for customer's installed base, which come with very healthy margins. Naturally DUV (immersion & dry) has a much bigger installed base.

 

Agree that "raising prices by 50%" is totally irrealistic and not a viable/constructive approach for an industry that is so interdependent (sometimes promiscuous); and where 61% of its revenue comes just from a handful of customers. 

There’s something to dislike about asml for sure— they take a whole year to make like 50 machines.. it’s very hard for them to scale up production . That’s why i think klac/amat/lrcx might be better?

 

[zippy1]

26 minutes ago, sleepydragon said:

There’s something to dislike about asml for sure— they take a whole year to make like 50 machines.. it’s very hard for them to scale up production . That’s why i think klac/amat/lrcx might be better?

 

Most of these other suppliers for othe equipment, the foundries can have second sources....
ASML is a bit different in suppliing EUV.    
ASML makes EUV and DUV-immersion.  Nikon can make DUV-immersion but no EUV.  Canon only make DUV and older ... 
ASML cannot raise price by 50% like many had said since there are only a few customers. 
However, the customers cannot ask for price cut either since there is only one supplier... 
The customers can try to double patterning or quaduaple patterning to stay with older machines.  
However, this just means not using EUV-High NA and stay at EUV.  Both EUV-high NA and EUV are from ASML. 
  

[sleepydragon]

1 hour ago, zippy1 said:

Most of these other suppliers for othe equipment, the foundries can have second sources....
ASML is a bit different in suppliing EUV.    
ASML makes EUV and DUV-immersion.  Nikon can make DUV-immersion but no EUV.  Canon only make DUV and older ... 
ASML cannot raise price by 50% like many had said since there are only a few customers. 
However, the customers cannot ask for price cut either since there is only one supplier... 
The customers can try to double patterning or quaduaple patterning to stay with older machines.  
However, this just means not using EUV-High NA and stay at EUV.  Both EUV-high NA and EUV are from ASML. 
  

 

I think not being able to raise prices applies to all semi equipment suppliers -- they can increase their revenues by providing additional service or products, but not easy to raise prices on existing products -- they all largely sell to TSM , who is a cheap a** I guess!

Also, I think KLAC is probably as close as 100% monopoly like ASML? AMAT is less but maybe it has bigger revenue upside because it has so many different products/services.

 

[kab60]

I'm stuffing myself to the gills with $FOUR. It has all the hallmarks of something hated right now.

 

Payments. Software. Financial shenanigans amongst peers (Fiserv) as well as fundamental business problems (Paypal). Aggressive accounting (like everybody else apart from Wise and Adyen). Leverage. Massive acquisition in Europe that won't help numbers before H2' 26 and beyond.

[dipod]

7 hours ago, sleepydragon said:

If buying call, u know they are going to announce safty data by 6/30. That’s a fixed announced date. though options are very expensive now.

Yup, the IV is too high. I may nibble at a few calls here and there but honestly I feel more comfortable with the common stock. I think this thing would yield a decent return from here over the next year.

[zippy1]

5 hours ago, sleepydragon said:

 

I think not being able to raise prices applies to all semi equipment suppliers -- they can increase their revenues by providing additional service or products, but not easy to raise prices on existing products -- they all largely sell to TSM , who is a cheap a** I guess!

Also, I think KLAC is probably as close as 100% monopoly like ASML? AMAT is less but maybe it has bigger revenue upside because it has so many different products/services.

 

KLA is dominant in the optical inspection.
ASML actually is dominant in the e-beam inspection, which is needed for the smallest dimension check. There was a dominant Taiwanese company, who got bought out by ASML in 2016.
The legend was the KLA worked on e-beam inspection but did not make it a product for fear of disrupting their own optical inspection business. 
This Taiwanese upstart worked on e-beam inspection, which got adopted around 28nm node when metal gate structures needs e-beam inspection.
it then was bought by ASML.
 
I

[Spekulatius]

Bought several stocks:

Nice Information Service (Korean credit bureau)

TRU (US credit bureau)

INTU, Adyen

 

Mexican airports concessions: OMAB, ASR 

 

Edited Thursday at 12:28 PM by Spekulatius

[Spekulatius]

3 hours ago, zippy1 said:

KLA is dominant in the optical inspection.
ASML actually is dominant in the e-beam inspection, which is needed for the smallest dimension check. There was a dominant Taiwanese company, who got bought out by ASML in 2016.
The legend was the KLA worked on e-beam inspection but did not make it a product for fear of disrupting their own optical inspection business. 
This Taiwanese upstart worked on e-beam inspection, which got adopted around 28nm node when metal gate structures needs e-beam inspection.
it then was bought by ASML.
 
I

E-beam inspection (basically a modified electron microscope) is likely necessary for the smallest structure, so I think there is s risk of KLAC getting disrupted at the high end if they can’t make a competing product.

 

e-beam based system fundamentally can reach much higher resolution than optical base systems.

[Milu]

Initial 4% position in Uber. I think it represents a great entry point at sub $68. Like the management, low capital intensity (for now), global brand recognition and expansion, and expansion of new higher margin services like Uber one subscription and advertising. Current price is just about down to a price I am comfortable paying, would average in further should price drop down below $50.

[Lollapalooza]

18 minutes ago, Spekulatius said:

E-beam inspection (basically a modified electron microscope) is likely necessary for the smallest structure, so I think there is s risk of KLAC getting disrupted at the high end if they can’t make a competing product.

 

e-beam based system fundamentally can reach much higher resolution than optical base systems.

yes, but good luck scaling it to high volume manufacturing.

That and other forms of non-litho technology is what could eventually disrupt ASML's business in my view.

 

I would see that as a bigger threat than someone being able to catchup and replicate ASML monopoly on EUV.

 

That said, i also believe they wont flex their pricing power as this industry is very interdependent.

[zippy1]

23 minutes ago, Spekulatius said:

E-beam inspection (basically a modified electron microscope) is likely necessary for the smallest structure, so I think there is s risk of KLAC getting disrupted at the high end if they can’t make a competing product.

 

e-beam based system fundamentally can reach much higher resolution than optical base systems.

Years ago, we were working on 28nm high-K metal gate. A friend was comparing three vendors on how they can inspect the metal gates. Only the one with E-beam inspection can do it.  My friend typed up the memo and our company bought a lot of the e-beam inspection tools..  Of course, my friend can only watch that stock rockets.... The stock got bought out by ASML in 2016... 

[frommi]

bought some Adobe Leap Calls 2028, 220 strike.

[TwoCitiesCapital]

8 minutes ago, frommi said:

bought some Adobe Leap Calls 2028, 220 strike.

 

Also started a position in ADBE today. Wanted to get in before earnings, but content to hold long-term. 

 

Started a position in PYPL too. 

 

Both idea shamelessly stolen from Michael Burry. 

Edited Thursday at 04:29 PM by TwoCitiesCapital

[sleepydragon]

6 hours ago, zippy1 said:

KLA is dominant in the optical inspection.
ASML actually is dominant in the e-beam inspection, which is needed for the smallest dimension check. There was a dominant Taiwanese company, who got bought out by ASML in 2016.
The legend was the KLA worked on e-beam inspection but did not make it a product for fear of disrupting their own optical inspection business. 
This Taiwanese upstart worked on e-beam inspection, which got adopted around 28nm node when metal gate structures needs e-beam inspection.
it then was bought by ASML.
 
I

but isn’t klac also has ebeam inspection product now… probably not as good/dominant  as ASML’s one? Thanks’

[dipod]

Nibbled on PDD calls expiring a few weeks from now.

[EgonKuhn]

New starter position in GWRE

[Paarslaars]

Added to NOW and MSTR