Andrew Ling

Solar Power Will Be Transformational in the Next Decade

Supershort you're missing the point completely. A major reason the economy is in such bad shape is due to rising energy prices which benefits solar stocks. Would you also short agricultural stocks, energy, and mining due to the economic downturn?

Trina Solar: Best Value in the Solar Space

Also, all the debate your hear about silicon supply and pricing, government subsidies, new cigs entrants, solar's viability vs other renewables etc are all really arguments about whether future earnings will be better or worse than expect. 2009 silicon prices has a direct impact on 2009 and 2010 earnings of all solar stocks, and therefore effects today's stock price. Whether solar's market share vs wind in 2030 is a sort of 2030 earnings debate, with far less effect on today's share prices. The only reason that the dramatic stock movements are cause by things such as current and next quarter's earnings is because 2009 earnings change very gradually. They determine the intermediate term performance of the stock.

Trina Solar: Best Value in the Solar Space

Ignoring 2009/2010 earnings is a big mistake. 2009 earnings on what today's stocks will be primarily trading on. Even if you find the analyst's estimates unreliable you should at least use 2007/2008 earnings and growth rates to extrapolate 2009 earnings. In Feb. 07 FSLR analysts called for 0 08 earnings. I speculated $1.50 08 earnings and bought the stock. The rest is history. If you ignore them you're just throwing darts at the Wall Street journal. Just because speculation is difficult it doesn't mean you shouldn't speculate at all.

Solar Power Will Be Transformational in the Next Decade

Also, consider the adoption of past comparable technologies. In order to displace an old technology it's not enough for the new technology to be equal. It has to be far superior. I've always been an early adopter, one of the first 1% to switch to a new technology e.g. dialup modem to broadband, film to digital cameras, cds to dvds to blu-ray. But there is a major lag between when a product seems clearly superior to me and other early adopters and when the general public finally switch over.

A good example of this is the number of HDTVs that were still flying off the shelves last year that were NOT 1080p capable. By the year the prices for 720/1080i and 1080p were already comparable. People just weren't aware what 1080p was.

Another is when Intel introduced the Core Duo. Everyone that reads benchmarking sites knew this was the end for AMD. After a decade of having a superior product but being barely able to compete with Intel they now had an inferior product and nothing in the pipeline. The market is still discovering this as proven by the fact the entire market sold off when AMD missed but then rallied when Intel beat. This was to be expected.

Solar Power Will Be Transformational in the Next Decade

Jack, using solar water heaters as a example, just because a technology is economical doesn't mean it will catch on quickly. Solar water heaters are such a great value and have been for decades. But relatively few in the States have one. Then again, the Toyota Corolla is probably the most economical car on the market but again
it's not even the best selling car in the country.

Most of us agree that solar will take the lion's share of new energy generation 30 years from now due to economics, but how much share it has in 5 years will depend highly on the whims of people and governments.