Probably The One Monthly Report To Look Out For

If one is a technology sector investor, especially among the hype of artificial intelligence (AI), one monthly report would likely be of interest to those vested. That report is the monthly revenue report of Taiwan Semiconductor Manufacturing Company, better known as TSMC.

 

Screenshot taken from TSMC 2020 Annual Report cover

While monthly reporting is a rarity in the United States or in our local markets, it is a mandatory requirement imposed on companies listed in Taiwan. With TSMC being bounded by this rule, and its importance in producing the chips powering the technology sector/industry and the current AI trend, the reports come in useful as a leading indicator of its clients’ potential earnings.

TSMC’s customer base is relatively concentrated on a few players that we know: Apple, Nvidia, Broadcom, etc., and these companies are driving the AI narrative. Hence, an increase in TSMC revenue means that the customers are demanding more of its manufactured chips, right?

Well, not really. Increased revenue from providing chips downstream may not translate to customers selling more products or services utilising the chips. A couple of reasons explain why this is so.

The first is stockpiling: a customer may be building up its inventory in anticipation of future demand, so these do not translate as additional profits reported. Next is pricing: with chips, especially the higher end ones, an increase in price with the same quantity ordered could be seen as revenue increase on the surface.

Still, the blog post about TSMC’s monthly revenue report brings forth one of the concepts of the Bedokian Portfolio: associative investing¹.

In associative investing, the view is that every factor and component in the markets and economy are related to one another to a certain degree. In TSMC’s case, its downstream effects may play a part in the customers’ earnings, while its upstream players such as the suppliers may see increased revenues if TSMC orders more raw materials and parts. Sidestream wise, one could observe the competitors and their financials; if everyone is earning, it means the general inclination is the sector/industry that is supporting is likely expanding.

While TSMC’s monthly revenue report serves as a high-frequency, invaluable barometer for the health of the AI supply chain, interpreting it requires nuance. By looking beyond the headline numbers to account for lead times, pricing shifts, and ecosystem ripple effects across upstream suppliers and downstream clients, investors can effectively apply associative investing to gain a clearer, well-rounded edge in the technology sector.

Disclosure

The Bedokian is vested in Apple, Nvidia and Broadcom.

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Disclaimer

1 – The Bedokian Portfolio (2^nd Ed), p137-138

Here We Go Again

The United States Federal Reserve has raised interest rates by 25 basis points to a target range of 3.75% to 4.00%, its first hike since July 2023. It also signalled that another hike could come before the end of 2026¹. The decision comes against persistently elevated inflation, with higher energy prices adding to the pressure alongside resilient economic activity and investment.

I have covered the effects of higher interest rates before, here and here.

Picture generated by ChatGPT

 

In general, higher rates can put pressure on interest-rate-sensitive assets such as bonds and real estate investment trusts (REITs), while also affecting selected equities through higher financing costs and valuations. Cash and short-term government securities, on the other hand, can benefit from higher yields.

REITs Issues…Again

This has got to be one of my nth posts on REITs.

As a leveraged asset class, REITs tend to attract attention whenever interest rates rise. Higher borrowing costs can hurt, while higher bond yields can narrow the yield premium investors demand from REITs. It is therefore not surprising that Singapore-listed REITs have continued to struggle.

In chat groups and online discussions, I have come across investors who appear to have given up on them. Still, this is where one should step back.

View In Totality, Not Parts

It can be demoralising to see one's REIT holdings going down. If REITs are part of the intended portfolio allocation, however, falling prices may cause their weight to fall below target. From a portfolio perspective, this could present an opportunity to add than to abandon them, assuming the underlying REITs still meet the investment guidelines.

The idea is not to buy simply because prices have fallen; rather, it is to rebalance the portfolio towards its intended allocation, while considering the valuation and quality of the individual counters.

A falling asset class is not automatically a bargain. Nor is it automatically something to avoid. The more useful question is not about why REITs are falling, but rather what the portfolio looks like now.

This is why I keep coming back to the importance of viewing the portfolio in totality. Markets will continue to move, interest rates will rise and fall, and REITs will probably continue to give investors reasons to complain. That is nothing particularly new.

The portfolio, however, is supposed to provide the bigger picture.

Try out the Growth Indicator, Equities Indicator and S-REITs Indicator screening app for FREE. You can use it as a web page or save it as an app-like bookmark on your home screen of your computer, tablet or mobile for faster access.

Disclaimer

 

1 – Cox, Jeff. Fed approves interest rate hike, signals one more to come this year. CNBC. 16 Sep 2026. https://www.cnbc.com/2026/09/16/fed-rate-decision-september-2026.html (accessed 18 Sep 2026)

Inside The Bedokian’s Portfolio: Arista Networks

Inside The Bedokian’s Portfolio is an intermittent series where I will reveal what we have in our portfolio, one company/bond/REIT/ETF at a time. In each post I will briefly give an overview of the counter, why I had selected it and what possibly lies ahead in its future.

For this issue, I will discuss about the NYSE-listed Arista Networks (ticker: ANET).

 

Screenshot taken from Arista Network’s 2025 Annual Report cover.

Part of the AI Revolution

Most people tend to associate artificial intelligence (AI) with chip producers, hyperscalers and large language models. ANET, however, is what I would describe as a “picks and shovels” company in the AI ecosystem. It provides networking equipment and software that allow the servers and accelerators within large data centres and AI clusters to communicate with one another.

Since ANET is classified as a short- to mid-term AI play, we placed it under the Trading Portfolio, with the possibility of integrating it into the investment Bedokian Portfolio should its fundamentals continue to hold. This was somewhat like our Nvidia entry a couple of years ago.

Fundamental Analysis (Bedokian Style)

Below are the results generated by the Growth Indicator app, showing the numbers according to The Bedokian Portfolio’s selection guidelines for growth investing. It also displays AI generated insights of the market share, sector/industry SWOT analysis, and macro factors, of which are part of the Environmental Factors and Economic Conditions levels of The Bedokian Portfolio’s fundamental analysis:

 

 Screenshot from report downloaded from the Growth Indicator app. Click to enlarge view

 

A Light Amber status means that ANET fulfils three out of five selection guidelines, which at first glance, the counter seems average and nothing to shout about. Looking deeper into its financials tells a different story: ANET has reported growth in diluted earnings per share (EPS) from USD 1.65 in end 2023 to USD 2.75 in end 2025, with a trailing 12-month diluted EPS at USD 3.16. Free cash flow (FCF) wise, it has increased from nearly USD 2 billion in 2023 to USD 4.25 billion in 2025. The surprising thing from ANET, and a rare structural feature in United States technology sector is the low debt-to-equity (D/E) ratio.

 

The points covered in the previous paragraph can be seen in the other two passed conditions: positive FCF and constant or reducing D/E ratios for the past three years. Addressing one of the two failed guidelines, the return on equity (ROE), I had stated in the eBook that a higher ROE needs to be looked into detail due to its higher net income may be attributed more to liabilities than equity¹. However, for ANET’s case, the concerns are moot due to the low D/E.

Considering the above, a qualitative call is made on our end to override the concern of a higher PEG (1.44).

The Future

The burgeoning AI space, coupled with its deemed essential role of being a pick/shovel, are giving expanding opportunities for ANET. As mentioned earlier, this counter is primarily a trading play, so our set target price for release is around the USD 240 to USD 250 range. If ANET’s moat widens and/or further catalysts are identified, a longer-term hold is contemplated.

Disclosure

Bought ANET at:

USD 195.00 at Sep 2026 

All figures are obtained from Yahoo Finance unless otherwise specified.

Try out the Growth Indicator, Equities Indicator and S-REITs Indicator screening app for FREE. You can use it as a web page or save it as an app-like bookmark on your home screen of your computer, tablet or mobile for faster access.

Disclaimer

1 – The Bedokian Portfolio (2^nd Ed), p152-153

Short Take: Bonds, Yen And Interest Rates

Introducing a new series called Short Take, where I try to explain complex goings-on in the financial markets and economy in digestible bits, and tie them back to the Bedokian Portfolio investment philosophy and methodology where relevant.

Kicking off the series: a concise look at recent rising yields and the Japanese yen.

Picture generated by Nano Banana and Chat GPT

Global bond markets and currency values are undergoing significant shifts. The United States (U.S.) Treasury yields remain near multi-year highs due to economic strength, government borrowing, and sticky inflation, while Japan’s 10-year bond yield recently breached 3%, a level unseen since 1996. Meanwhile, the U.S. Federal Reserve (Fed) policy rate stands at 3.50–3.75%.

These moving parts are interconnected and ripple through global portfolios in the following ways:

The Yen Carry Trade

For years, investors borrowed cheap yen at low interest rates to invest in higher-yielding U.S. assets. If the rate gap narrows, either via Fed cuts or Bank of Japan tightening, investors may unwind positions and buy back yen. That could contribute to volatility similar in nature to what was seen in August 2024.

Broader Market Impact

Rising U.S. yields increase corporate and real estate borrowing costs while making fixed income more attractive relative to equities. Higher Japanese yields may encourage domestic investors to repatriate capital from foreign markets.

Singapore Portfolio Implications

Local investors feel this through elevated borrowing costs for Singapore real estate investment trusts, higher domestic bond yields, and currency fluctuations that alter the Singapore-dollar value of foreign holdings.

The Bedokian’s Short Take

Macroeconomic factors form the economic conditions layer of fundamental analysis in The Bedokian Portfolio¹. Rates drive bond yields, rate differentials drive currencies, and currency movements drive capital flows across global markets.

However, analysing macro conditions is about understanding risk transmission, not forecasting market directions. The most one can do is guesstimate. No one can consistently predict central bank moves or currency movements. The goal is to build a resilient, diversified portfolio across distinct asset classes that can withstand economic uncertainty, rather than reacting to short-term market noise.

Related post

The Economic Machine Analogy, Dimension And Degree

Try out the Growth Indicator, Equities Indicator and S-REITs Indicator screening app for FREE. You can use it as a web page or save it as an app-like bookmark on your home screen of your computer, tablet or mobile for faster access.

Disclaimer

1 – The Bedokian Portfolio (2^nd Ed), p91-93