February 18


Check out solar stocks on Feb 18. All of ’em.

I know, I am obsessed. But the volatility in this sector is too enticing to avoid.

I have scoured news and notes around Feb 18 to see what the heck inspired this very obvious top in solar stocks. There are two things I have concluded:

  • the Italian minister came out and said “there will be no cap,” and shorts rightly assumed he was covering
  • Chanos began shorting all solar stocks on the same day in order to support his public FSLR thesis

To be fair, it was the right move to short solar on the minister’s comments because chaos ensued afterward. It doesn’t matter if the stocks became cheaper because they were all stupid cheap to begin with, in fact a number are now at a lower valuation than during the Dark Ages of 08/09.

Let’s get the easy stuff out of the way. Chanos is an idiot. If you are going to be public about your position – long or short – you should be specific. There are way too many vagaries in his public reasons for shorting FSLR. Granted, he is not obligated to be honest in public testimony on public TV ( or even semi-pay TV like CNBC ), but his presence on CNBC suggests some form of honesty. His one-hit wonder bit on Enron does not allow him to willy-nilly accuse FSLR and its auditors of “accounting issues.” He is a jackass in search of an open manhole. Moving on.

My real point is that no rational form of fundies would have caught the date of this downturn in solar stocks. One could argue that “we were peaking and needed to come down,” but how does that not work with “we are bottoming and needed to go up?”

But let’s assume the whole double negative bit associated with Italian minister signaling gov’tl chaos led to the downturn…does the recent clearing of such chaos mean solar stocks are headed higher?

2 Responses to “February 18”

  1. Movement in solar stocks is very appealing. From your observations of solar in the past, do you think that as we are seeing more and more alternative fuels that investing heavily in solar for the longer term is a good move?

    • Analyst Bomber

      You have two things in there:

      1. There are no long-only’s in US listed solar – these are merely trading stocks for now. The closest you come to long-only’s is FSLR, but then you get the stupidity of Chanos screwing things up for you.

      2. The only winners in alt energy are those whose cost is low enough to compete with standard forms of generation. Wind and solar are there right now, but then the question is “do we need it?” This is probably why US listed solar is a cute exercise in trading while Asia listed solar is considered a long term investment.

      If you are looking to buy solar and close your eyes, get an IBKR account and buy HK listed shares or Korea listed shares. Otherwise, be prepared to buy US listed solar at lows and be prepared to sell often.

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