Are alternative energy stocks gearing up for a big post-election gain?
If the Claymore/MAC Global Solar Index ETF (TAN) is any measure, the possibility of an Obama victory had investors excited about alternative energy. It was up almost 14 percent yesterday.
A word of caution: the Democratic victory could make for a better subsidy environment for solar, but a glut of panels on the market next year could matter more. Also, given the brutal drop in green shares so far this year, remember that Wall Street is already worried that the economy will remain unfriendly to costly long-term investments in emerging energy.
Consider this bit from Barron's:
While it may be true in the long run that an Obama presidency will be good for solar shares, a change of administrations will not be a cure-all. Raymond James analyst Pavel Molchanov this morning cautioned that investors should not expect any "instant gratification in terms of new goodies from Washington," especially given that Congress has already approved an 8-year extension of the solar investment tax credit.