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Thursday, March 31, 2011

Why Solar (SPWRA) (FSLR) (STP) (TSL) (YGE) is a Lousy Investment

Even though they are media darlings, the solar sector, and by extension, solar companies, like SunPower (SPWRA), First Solar (FSLR), Suntech (STP), Trina Solar (TSL) and Yingli Green Energy (YGE), are louse investments, as demand is totally out of the control of the companies because of the industry being propped up by taxpayer dollars around the world, based on government fantasies of so-called "clean" energy.

Major markets like Germany, France and Italy have already signalled they're cutting back on subsidies because of budgetary pressures, and that is completely out of control of any solar company, no matter where it's operating from.

There is also the inability to really understand how these companies are generating revenue, as many have acquired project pipelines or have gone downstream, clouding the picture for those researching the firms.

At the same time the subsidies and major markets are cutting back on demand, many of the solar companies are increasing supply, making the sector even more less likely to generate a profit, as pricing will come under pressure.

About all a solar company can do is focus on lowering costs and hopefully develop some type of a brand in the minds of its customers, although that hasn't been a strength in the industry.

All of this is to say is solar is an artificial market not developing because of consumer demand but from being forced on the market by world governments.

That means there is no clue as to being able to trust metrics or the future of an industry that exists only because of being propped up by countries and not markets.

In other words, there's no way to project how the sector or individual companies will perform, making investment in the sector a form of gambling rather than investing.

18 comments:

Anonymous said...

Oil also receives billions in tax benefits from the government, so does that mean all the money that oil company makes is meaningless? Shouldn't invest in it? You're an idiot. The defense sector is also dependent on government policies, so does anyone expect them to make nothing tomorrow? Think before you even write anything. This is worst than a high school paper.

Anonymous said...

Agree with the first comment...... i guess the author was losing a lot of $$$ in solar stock few years ago. what a loser!!!

Anonymous said...

according to his reason, GE and CSCO also lousy investment, this guy just use his ass to think......

Anonymous said...

I agree with previous comments.So the writer has decided that the government is somehow NOT part of the market?Doesn't he realize that legislation and government decisions impact any sector, not just the solar industry?

GOLDSUCKS said...

he's just a gold bug who can't stand the fact that certain stocks, and even silver, has outpaced gains in gold.

he's news for you buddy. you must choose either relative safety, or risk some stability in your portfolio for potential gains.

Anonymous said...

I agree I could have written a more valid article and made a better point. Go home.

Daniel said...

I guess healthcare, pharmaceuticals, real estate, defense stocks are also crap

jim said...

That sound like the babbling of a guy I heard walking down the street in San Francisco a few weeks ago. He was wearing a dirty trench coat, had stringy hair down to his shoulders, a beard (no moustache), and binoculars around his neck. As a matter of fact, I think it was a direct quote. On the back of his coat was scrawled, in magic marker, "I love the Koch Brothers".
He was also wearing a button that read, "Nukes Rule".

Neo said...

Never heard a such stupid analysis before. Is this guy really serious or does he have a hidden agenda?

Anonymous said...

GOD DAAAAAA-YAAAAAMMMM! This is some stupid ay-yes sheit! I kaynt believe I not only wasted the time reading it, but also the time to right this accented and pointless comment! It blows my mind, but sometimes you just gotta do it, much like Nigerian freedom fighters.

Anonymous said...

"Write", not "right". Whose the stupid one, now, moron??

Anonymous said...

"Who's", not "Whose". Maybe you're all on the left side of the IQ score bell curve. I mean, frankly, somebody's got to populate that side - why not you? JESUS CHRIST and ALLAH and BUDDAH!

Anonymous said...

It's "Buddha", not "Buddah", you intolerant grammar nazi and religiously ignorant fool!

Anonymous said...

Did you just ignore the news this past week on the huge spending for solar and clean energy. You keep your gold and its little gain this quarter. I will take my huge profit from solar and reinvest in more solar.

Anonymous said...

hey guys, please stop. and it's "Nazi", not "nazi". the Nazis could claim you are ignorant and offending them.

Anonymous said...

It is time to buy solar stocks. Japan just raised the solar feed-in-tariff by 65% effective April 1st. Not natural gas, not coal, not nuke. Compare the time to install solar panel vs. the time to build a thermal power plant, this is why solar energy shine.

Anonymous said...

with nuclear on it's way out and public sentiment moving away from oil, solar is a great investment.

This guy isn't considering the big pic.

Anonymous said...

This guy is a MORON---Why would you make a headline for words coming out of a morons' mouth?