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  • TowerJazz: A Towering Double In Share Price [View article]
    203,

    That's a problem. I have an accountant who I've known and used for 48 years. He forgets things and mis-adds numbers now. I can't fire him. He was always there for me when I needed him.

    So I really could use and accountant who could take his work and make it right but make it look like the changes were "suggestions" from me. Know anyone like that?
    Aug 27 01:28 PM | Likes Like |Link to Comment
  • TowerJazz: A Towering Double In Share Price [View article]
    Jaret,

    >>I'll come to you when it comes time to diversify into real estate.<<

    I don't know anything about real estate. I only know about mixed use apartment buildings in the Carnegie hill neighborhood on the upper east side of Manhattan. Now if you ever want to diversify into that...
    Aug 27 12:52 PM | 1 Like Like |Link to Comment
  • TowerJazz: A Towering Double In Share Price [View article]
    tromur,

    I have been limiting myself to three stocks since 2004 when I decided to take a substantial amount of money out of my illiquid real estate holdings and put it in liquid securities.

    I spend five or six hours a day on research to keep up with developments in the stocks and their industries. For that reason, I tend to invest in the same or related industries for a while and when I switch, switch all three to the new industry.

    I do the same thing in real estate. All of my holdings are mixed use apartment buildings in one neighborhood, where I know the residential rental and commercial rental markets intimately. I do the same thing in the commercial space market in that neighborhood. Except for one year in one building, all of my stores are rented to operating restaurants.

    My average annual return is north of 40%. In 2010, I took seven figures out of liquid securities and put it back into Manhattan real estate into mixed use buildings on the upper east side.

    Take a look at my profile. Diversification for me means having both real estate all of one type in one 10 x 3 block neighborhood and diversifying into two or three stocks in related industries. I can't stay on top of more than that. I need time for poker, television, my dogs, and most importantly, my wife.

    By the way I'm retired. I used to work mush harder than this. Now I mostly get Sundays off.
    Aug 27 11:16 AM | 1 Like Like |Link to Comment
  • TowerJazz: A Towering Double In Share Price [View article]
    Thanks, Jaret.

    Now I have to decide if I want to change my three stock rule or sell something.
    Aug 27 10:19 AM | Likes Like |Link to Comment
  • Micron: Two Scenarios [View article]
    cmcsess,

    I seem to remember that these guys got busted once for fixing prices.

    They learned their lesson.


    This time they won't get busted.
    Aug 27 12:18 AM | 1 Like Like |Link to Comment
  • Report: China considering large investment in electric-car charging technology [View news story]
    Depends on where in China. In Beijing, true. In Dalian, not so much. I'll be there for three weeks late September - early October. I'll let you know what color the sun is when I get there. :-)
    Aug 26 12:12 PM | Likes Like |Link to Comment
  • SolarCity: An Analysis Of Retained Value And A Price Comparison Of Its Offerings [View article]
    1499,

    >>my own model<<

    Thanks a bunch. This is a downloadable and configurable spreadsheet we can all play around with and use to build in the financing aspects. It's just the right time for it. At least for me.

    Great job.

    I've been working with Bank of America's model. That's more of a Tax Equity revolving line of credit with participants moving in and out. I've never seen one like this before. Has me scratching my head and making a lot of phone calls. I don't have any sensible understandings yet.
    Aug 26 09:03 AM | Likes Like |Link to Comment
  • Micron: Two Scenarios [View article]
    I think there is a lot of "much ado about nothing" in this commentary. Here's how I see it:

    Russ sees something significant. He writes an article to tell us about it. A fact could mean this - or it could mean exactly the opposite. But voila, there's a tell. Watch Charlie's hands tomorrow. If he scratches his nose it means this. If he scratches his ear it means the opposite. (You can tell I play poker, right?)

    Many of us have been a team for a fairly long while, and a goo0d team. We've figured a lot of stuff out working together.

    My opinion is that anyone who think Russ has the wrong motives, hasn't been reading carefully. Anyone who thinks Russ's wild speculation is nonsense, will stay poorer a lot longer than the person who looks at it seriously, no matter how crazy it sounds.

    Let's get back to being the team that we are. We are doing real well that way.

    Enough preaching. Back to work.
    Aug 26 08:52 AM | 20 Likes Like |Link to Comment
  • Micron: Two Scenarios [View article]
    Russ,

    As you've probably figured out, I have a great deal of real world experience in various businesses. One business I have never been involved with is one where one division produces parts which are both merchandised and used to supply another division. So I am trying to think that through de novo.

    I represented some public companies, but my specialty was representing very large companies owned by a single individual or two equal partners. There was no politics. It was do it my way or there's the door. Usually, I was the owner's right-hand man in everything. I mean everything. If his 14 year old daughter got pregnant, it was my job to figure that out. The only politics were between the owner and his girlfriend (always about the wife). I had to fix that too. Interesting life. I had just about every human problem possible to deal with. Sometimes I miss it.

    Thanks for the sign post. I'll watch the Apple memory options on the IPhone 6 closely.
    Aug 26 08:37 AM | 1 Like Like |Link to Comment
  • Micron: Two Scenarios [View article]
    Russ,

    You could be right. But I hope not.

    The logic can cut either way.

    You pays your money and you takes your choice. Full speed ahead. Or behind?
    Aug 26 12:09 AM | Likes Like |Link to Comment
  • SolarCity: An Analysis Of Retained Value And A Price Comparison Of Its Offerings [View article]
    User1499,

    Great link. Real raw numbers to work with. Thanks.
    Aug 25 11:32 PM | Likes Like |Link to Comment
  • SolarCity: An Analysis Of Retained Value And A Price Comparison Of Its Offerings [View article]
    Big Volt,

    >>Please read this GTM article and reconsider your inverter replacement cost: <<

    Good read although you had already persuaded me.
    Aug 25 11:29 PM | Likes Like |Link to Comment
  • SolarCity: An Analysis Of Retained Value And A Price Comparison Of Its Offerings [View article]
    BigVolt,

    Good points.

    >>I thought SC was using only string inverters<<

    I didn't know that.

    >>then you need to adjust the $120 per inverter costs down<<

    For sure.

    >>How much, I don't know<<

    Me neither. I'll find out.

    >>but it sound excessively high.<<

    It seems so.

    >>So I'd like to know how you came up with a failure rate of 1 inverter per year for the first 7 years and one more than that each 7 year thereafter?<<
    I used some statistics for failure rates of items with seven year useful lives from my memory and instincts back from when I took a bunch of statistics and probability courses. My memory is old and imperfect to say the least but my instincts are usually pretty good. If there is a statistician out there, maybe you could help us out.

    >> This again sound excessive.<<

    Could be. I had to start somewhere and I knew 0 was wrong.

    >>String inverters have a 10 year warranty...Even with these failures, a solar installer gets compensated for replacement by the mfg,<<

    I just plain forgot that. Thanks for catching it. I'll adjust that cost down to peanuts.
    Aug 25 11:24 PM | Likes Like |Link to Comment
  • SolarCity: An Analysis Of Retained Value And A Price Comparison Of Its Offerings [View article]
    User1499,

    Some good points.

    >>In the spreadsheets, you're assuming PPA and lease prices at the NV price level. The majority of SolarCity's business is in CA with higher average prices. I've heard their average PPA is around 15 c/W with an average escalator of 1.7%...<<

    OK. Nevada was a starting point. I need to redo the spreadsheet to allow the starting price to be configurable as well as the escalator. Then we can look at all the possibilities.

    >> At $3/W (SolarCity's reported all-in installation, sales and marketing, general and overhead cost) and a 15 c/W PPA, SolarCity can generate a cash-on-cash IRR (not including tax credits and depreciation, over just the 20-year lease) of over 5%.<<

    I agree. Without the 30% Investment Tax Credit over just the 20 years, I get an Internal Rate of Return of 6.45%. That 15 cents starting price per kWh is quite stiff. It starts the cash flow out 63% higher than the 9.21 cents/kWh SolarCity offers here in Southern Nevada. If SolarCity can sell that PPA at that price, they have a heck of a business.

    If you add in the cash flow from the Investment Tax Credit in the second year and put a 20% salvage value on it (to reflect renewal possibilities), you get an IRR of 9.67% at 15 cents/kWh. Now that's a business. Again, that 15 cents starting price per kWh is pretty stiff. If a business can raise prices by 63% without its costs going up, I would hope that it is making money - a lot of it.

    We need some Californians to verify SolarCity's price points. I could not find them online. All I could find is this: http://bit.ly/1qldHqU
    I have not quite figured out what the pretty colored maps mean. I wish they would give me numbers. :-)

    The purple and green maps indicate that California and Nevada are very close in available monthly savings and savings over time. But the red map indicates that the cost of buying a system is higher in Nevada. Less incentives, I guess. Blue is not helpful to me.

    >>Now throw in tax equity<<

    I did in my second example above which came to a 9.67% IRR.

    >>Credit Suisse reports <<

    Credit Suisse is one of eight managers of Tax Equity Financing groups. Maybe that makes them more qualified to tell us what SolarCity can do with Tax Equity but in my mind it makes them more biased. Besides, I don't ever let analysts tell me how to invest. I am my own analyst and I don't need them one whit. I have reviewed four "lending" agreements which tap Tax Equity Investors. The last one, the Bank of America one, is typical. It is 137 pages long with 37 pages of definitions. Try the restated and amended version on for size here: D:\Tony Data\Seeking Alpha\SolarCity\Loan Agreement BOA.htm There are four long amendments and one amended and restated version. They all have most of what I really want to know redacted for confidentiality reasons. I'll still figure it out. It'll just take me longer. Check back in a month.

    >>They are a financing company that raises money to cover up-front costs, and secures an ongoing value stream for shareholders without incurring dilution. <<

    They may just be a financing company period. They may be making whatever profit they are in fact making from financing rather than from placing solar systems. Nothing wrong with that. If SolarCity found a way to profitably sell a 30% ITC and double declining balance depreciation for a 30 years system depreciated over only five years at a profit, hey, a profit is a profit is a profit. I think that is a real possibility. But then we have to figure out whether this business is sustainable with a 10% ITC.

    >>Given this model, you need to look at how much value SolarCity keeps for shareholders - right now this is about $1.2/W if you exclude renewal value.<<

    So SolarCity says. I am trying to verify or refute that. If I invested in companies based on what the companies said, I'd own every stock that ever was. No company ever says "We have a bad business and it isn't going to get better". At least, none that I have ever heard. We have to derive those numbers ourselves to have a leg up on the other investors and, yes, the analysts too. They are also operating off what SolarCity tells them.

    >>-- Given this model, you need to look at how much value SolarCity keeps for shareholders <<

    Yup. I don't know what that is. I know what SolarCity says it is, but I like figuring things out for myself.

    >>My point here is that the unit economics are very strong.<<

    Looks that way on what you say is the rate for PPAs in California but not so much in Nevada. Nevada is still close and depends on how some more things we haven't figured out yet turn out.

    >>So there are risks. <<

    There are always risks. Without the risks, there wouldn't be any rewards.

    >>But continued cost reductions<<

    I didn't know there was any to continue.

    >>efficiencies, economies of scale<<

    Yup. Silevo should give them some of that.

    >>and new product offerings like storage have potential upsides as well.<<

    Yes. And direct sales if they can reign costs in to where a competitive price would be possible. And others that I haven't thought of and some that I have thought of. If I can think of it, so will any company with an Elon Musk in it.
    Aug 25 11:07 PM | Likes Like |Link to Comment
  • SolarCity: An Analysis Of Retained Value And A Price Comparison Of Its Offerings [View article]
    Thanks, Phred.

    It's nice to see a tech person here.
    Aug 25 06:14 PM | Likes Like |Link to Comment
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