I've bought as much as I'm willing to, when TAN was 5.7- 4.6 I have no more buy orders. My plan was to buy in increments, when TAN was between the lows of 2010 and 2009, and I've done that. At some point, we will get a rally. I haven't decided how much I'll sell then; I'll hold at least my single lowest-cost purchase in each of the 4 I own.
I think fundamentals trough for solars (measured by gross margins and GAAP EPS) at the latest in 1H12. We are seeing a lot of capacity being permanently taken out, and we are also seeing demand increase (in response to falling prices). So I think the supply/demand imbalance (caveat: this applies only to Tier 1) is fixed by 1H12 at the latest. And there is some possibility, 2Q11 gross margins were the trough (the optimistic scenario, but not impossible).
The macro situation will affect solar stock prices, in large and random ways. There is no way to anticipate when and what happens. For instance, a European sovereign defaults will cause a banking crisis, which in turn will shut off lending for a while. This could bring solar project development to an abrupt halt while the crisis lasts, and a lingering effect for many months after. If that happens, it will be a buying opportunity, for those who still have cash and courage. In anticipation of that possibility, I need to raise cash. My courage was also shaken, by TAN taking out the 2009 lows. |
