Title:   Friday POW! — Pick of the Week: TSMC (TSM) — the hard art of taking profits
Source:  Haymaker — Friday POW!
Author:  David Hay (The Haymaker Team)
Date:    2026-FEB-20 (post dated FEB 20, 2026)
URL:     https://haymaker.substack.com/p/friday-pow-b2b
Length:  written post (PAID), no timestamps
Note:    Verbatim article text below (written newsletter — no spoken fillers to strip). This POW!
         introduces a "revised format" balancing buy/hold/trim/sell guidance; the featured name is
         used as a worked example of disciplined, incremental profit-taking on a big winner — i.e.
         the stance is to TRIM, not add. Embedded images (not saved): a 6-year TSM price chart with
         breakout line, a transaction-summary table for the TSM dollar-cost-average example, and
         5-year P/S & P/E charts for TSM, GOOG and XOM, plus the image-only "Equity/Growth
         Recommended List" whose tickers are NOT text-readable (so portfolio.json is unchanged).
         The Recommended-List footnote again references the NVO timing miss.

================================================================

"Don't try to buy at the bottom and sell at the top. It can't be done except by liars… I'll give you the
bottom 10% and the top 10% of any move if I get to keep the middle 80%." -Bernard Baruch

The Hard Art of Taking Profits

In this week's POW! edition, we are introducing a revised format to make it easier for our paying
subscribers to read about our most actionable ideas. Even more importantly, it will allow us the space to
provide updates on existing positions. In other words, there will be more balance between buy, hold,
trim, and sell guidance. To facilitate that, individual name write-ups will be more concise.

As you've seen from our various return summary documents, we've put out an abundance of bullish guidance
over the last two years, in particular. Prior to the start of 2024, those were much less frequent but we
plan to disclose the returns for those years, as well. In fact, a prominent security from that earlier
era, which received a follow-up plug in February 2024 at an opportune time, is on deck today. We'll come
back to that one shortly.

Because subscribers who have been with us for the last couple of years, and have followed at least some of
our accumulation suggestions, should now hold a number of positions that are, more or less, our
responsibility. Frankly, we believe there's much too much emphasis on buying and not nearly enough on
either loss-minimization (i.e., cutting out losers before they become malignant to your portfolio) or
gain-realization. Even the best investors frequently admit selling is harder than buying.

We carry no illusions of clairvoyance when it comes to the path of future stock prices. That's why we're
fans of easing into positions when we're proposing portfolio additions. It's also the concession behind
our advocacy of a gradual, or dollar-cost-averaging, disposition process when it comes to winners. As you
all should know, we've been blessed with a plethora of those but they do create their own challenges. One
of the worst experiences an investor can have is to watch a stock erupt in price and then ultimately give
back all of that gain… or even flip into the loss column.

It's also not a great feeling to fully book a hefty gain and then watch the issue in question double,
triple, or more, after a complete exit. You no doubt have noticed that in almost all cases we incrementally
book profits, like 25% at a time. The above-referenced stock will provide an instructive example in that
regard, as paying subscribers will soon read.

In keeping with the abridged nature of this POW!, let's get to some specific examples…

Rather than keep you in suspense any longer, the equity in this week's spotlight is TSMC, Taiwan
Semiconductor (TSM). It first graced our pages (and, as you'll see, it's been some amazing grace, indeed)
in August of 2022 when it was trading around $84. Shortly thereafter, it tumbled to $70 and we gave it
another positive endorsement. From there, it zoomed back to $95 in early 2023. This is where our confessed
fallibility comes in: we proposed a trim might be advisable at that time.

From there it vaulted to essentially $150, just over a year later. But to reiterate, due the fact we had
advised a trim, not a sale, this was a happy, not sad, event. It also registered an impressive upside
range expansion in early 2024, as you can see below (score another win for the breakout process; note we
went back six years versus the usual five to better capture that penetration of long-term resistance). We
highlighted the encouraging nature of that breakout at the time.

[Image: Six-Year Price Chart of TSM with breakout line displayed — Bloomberg]

Making this even happier for us, we gave TSM a resounding endorsement in one of our earlier Haymaker
webinars, for top-tier subscribers, in January 2024. It was $115 at that point. In February 2024, we wrote
it up as a buy (along with Google) at $133.

By May of 2025, it had ripped to around $200. This precipitated another partial gain-harvesting
recommendation from us. Yet, as you can see above, it kept escalating and is now $303. That's up almost
four times (a "four-bagger" in Street-speak) from our initial bullish write-up. However, as we've seen, we
made some buy and trim calls along the way. Ergo, a recap is in order which we feel is instructive on how
to handle these types of blissful situations.

Let's assume $10,000 was originally invested, 25% more was invested on the initial dip, each subsequent
trim was 25% of the market value at that time, and that this dollar amount was reinvested on the early-2024
pullback. Here's transaction summary:
[Image: transaction summary table — Red Numbers = Capital Committed; Green Numbers = Capital Returned or
Ending Value]

Return on original investment = 215% (based on $12,500 initially invested; this is, very roughly, a 61%
per-year total return; however, Google Gemini calculates the annual internal rate of return at 46%. That
seems low to us, but let's go with it.)

This was a lot more work than we thought it would be when we thought up this "bright" idea. But we feel
it's a worthwhile exercise to give you a sense that even with some trimming on the way up, and a bit of
decently timed buying, this process can still deliver big gains. It's also a lower risk way to navigate
wild markets and the gyrations of individual stocks.

Interestingly, by using this dollar-cost-averaging approach, both on the downside and the upside, the net
dollar return was nearly identical (the original 119 shares would be worth $36,652 today; however, there
would have been some taxes incurred unless these moves were made inside of a tax-deferred account like an
IRA Rollover).

As you can see below, TSM is no longer the bargain it once was; while a P/E of 20 is not outrageous, 13
times sales is way up there. For sure, it is in an extremely enviable position in terms of dominating the
precision etching of the wafers that are essential for companies like Nvidia to fabricate their completed
AI chips. But the valuation displayed in this chart leaves scant room for disappointment. We'll leave it
to you, should you have followed at least one of our buy write-ups on TSM, whether you exit all of the
rest of the holding or do another partial sale. (The elderly Haymaker is retaining a modest position in
this one.)

[Image: Five-Year Price-to-Sales and P/E ratios for TSM — Bloomberg]

Similarly, two other companies that have been previously showcased as attractive names in past Haymaker
editions are also on the very spendy side: Google (GOOG) and Exxon (XOM).

(GOOG was around $140 back in February 2024 — it's now $315 — when we gave plugs to both it and TSM. The
former has been a particular favorite, though, as with TSM, we've recommended some gain-harvesting on the
way up.)

[Image: Five-Year Price-to-Sales and P/E Ratios for GOOG — Bloomberg]
[Image: Five-Year Price-to-Sales and P/E Ratios for XOM — Bloomberg]

The fact that so many valuation charts look like this does concern us… considerably. It's a key reason we
feel raising a hefty amount of cash — like up to 20% to 25% of your portfolio total — might be wise.

On a related note, it's worrisome that so many formerly value-type stocks like XOM are no longer actual
values. When even the long-despised energy sector contains fully- to over-priced names, a congenital
contrarian, like the aged Haymaker, has to wonder what this world is coming to!

For now, don't look a gift stock, or stocks, in the mouth.

The Haymaker Team

Equity/Growth Recommended List
*Note: These were all tax-loss recommendations which were highlighted in that context on December 1st,
2025 (cost reflects that date). That effect has now faded and we will be revising the table to reflect as
much next week. As you can see, this has been a successful package of trades though it would have been
more so with a timely sale of NVO when it ran up in January.
[Recommended List renders as an image — tickers not text-readable; portfolio.json unchanged.]