The goal is to end up, by end-2011, with longterm holdings in FSLR, TSL, (and perhaps YGE, JASO) at prices near the lows. Making ST trading profits is a secondary goal.
Message 26809951
Solar Investing Rules:
#1. The lowest-cost producers will get most of the available profits in this commodity industry.
#2. It's a cyclical industry, with high capital costs. Therefore, it isn't safe to buy the stocks, until expectations have bottomed, module prices have fallen to the vicinity of manufacturing costs, and external financing is unavailable for any capacity additions.
#3. After the IPO stage, a viable business plan must include internal funding of capex.
#4. Until one technology is clearly superior, it is best to reduce risk by investing in the best company in each technology.
#5. Higher barriers to entry are needed, or else nobody in solar will be able to maintain decent margins or consistent profit growth.
#6. Vertical integration, from polysilicon through installing systems, is necessary for success in solar.
#7. National Champions will be among the survivors.
#8. No solar company deserves a PE over 15 (using GAAP TTM EPS). Message 26495563 |
