MSA

Five Reasons the Market Could Crash This Fall

Mr. Summers is a crying fool, wishing he had gotten in on the correction run-up, and now hopes to create fear and angst and set off a market crash for two reasons:

1) To prove himself correct (his ego rules his opinions and emotions as can be read between the lines of his fear-monger based article); and

2) To buy into the market at lower prices.

First of all, Mr. Summers contention that HFTP make up %70 of market volume is absurd. And I challenge you directly, Mr Summers to show us the data/proof of this claim. Also, no matter how many times you slice and dice a 15,000 share order, when all is said and done, it is still 15,000 shares that have traded hands. Yes, there is some back-and-forth microsecond trading going on, but no to the tune of %70 - give me a break, Mr Summers, this claim is ludicrous and unsupportable.

Secondly, yes, the CDS world is a potential time bomb, that could easily wipe out some very large financial entities (ala AIG). But the 1 Quadrillion dollar amount is another figure that Mr. Summers must provide real proof of - outside of pulling it out of his ass. Again, Mr Summers, I challenge you to provide substantiating proof of your claim to the notional amount of CDS's slinking around the world. Further, Mr Summers, in his best "doom and gloom" fear inducing logic, conveniently forgets the "exchange" effect of monies paid out under credit default swaps (one entity gains what the other pays - nothwithstanding the muliple liabilities of a default swap sold multiple times, as did AIG).

Thirdly, Mr Summers, must be very new to the market, or is simply trying to re-style the market as a follower, as opposed to its historical function as a leading indicator. Green shoots may be difficult to see, and very delicate, but change always begins in small ways - everything cycles, from high to low and all there is in-between. So as to make this correction seem unreal/aberrational (which is impossible for a market to be as it is the sum of real numbers), Mr. Summers states the correction run-up is the greatest "short squeeze" of all time; this again shows Mr Summers inability to understand markets. Yes, short covering is a factor of any reversal, but the real tales of markets are "Oversold" and "Overbought"- these conditions are inevitably corrected. No one can argue that when the Dow went from 14,000 to 6,500 it was not Oversold - but many would not touch the market at 6,500 with a 100 ft. pole, only because they were "afraird". - only those who had the nerve, and a clear understanding of market dynmaics were able to overcome their fear (emotions) and put money into the market. Mr Summers, is/was not one of these clear, unemotional, thinkers.

Yes, the market may have come "too far too fast", but who is the judge of that - certainly not Mr. Summers. In this article, Mr. Summers is emotionally, and egotistically venting - he sat, and sat, and sat and watched the market rise, and rise, and rise, and now he is pissed, knows he missed the boat, and just can't admit he was wrong. So, Mr. Summers, takes out his pen, and says "I'll show the world I am right - I'll put the fear of God into anyone that is buying into this market - and by golly I WILL BE RIGHT ! ! ! " - just watch the market crash after "they" ( Mr Summers thinks his article will reach and affect everyone) read MY article".

Poor Mr Summers, you really ought to keep your emotions in check. The market does not care about your crying, and your doom and gloom, it just does its thing, Up and Down, This Way, and That Way, and no matter how much you wish/want it one way or the other, it will do what it does, regardless of you.

Sure, the market may retrace much of or all of its gains since March 9, 2009; I don't know what it will do. But I sure as hell don't think I am so knowing, and nor am I so afraid of the "boogie man" that I sit frozen in indecision, convinced that "I am right - and the damned market is wrong".

As the market moves, a smart man moves with it.

GLTA

AckerInvesting

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Overbought Stocks (7/21/09)

Rather simplistic here boys - I guess if all one had to do was gauge a stock by where it is relative to its 50dma then investing would be a snap. NOT ! ! !

Creating an Alternative Energy Mini-Basket

You did not identify your "third" stock by name/symbol. Please post this, if you will.

Regarding APWR I have been following it for two months, and have built a nice core position with the retracement of last week, after having traded it aggressively from 19 to 30. I agree with your assessment of APWR in all regards, and will continue to build on my core position as funds are available.

As for AMSC, I have followed this stock for years, and kick myself for not having taken a core position (I traded it back in the 10 to 14 range). Honestly though, AMSC, fundamentally is and has been overvalued (IMHO) for quite some time. It seems no matter how well their sales grow, they are not able to actually turn a profit, and while they have a very strong position in WTG electronics, these components are not truly proprietary, and hence subject to supply scavenging by others.

Good luck to you and all others.
MSA

ReneSola: Secondary Offering Pressures Shares

Skepticism is no doubt my view of this gentleman's blog. However, I would suggest that you take a look at Zach's website; you will see, first of all, a very shoddy website, and most importantly, his "articles" are, at least to me, obvious attempts to bolster his short positions by subterfuge and use of "good cop", "bad cop" phrasing. Further, it appears that Zach is a "one man shop" -his use of the title of Managing General Partner, and his assumed hedge fund, are rather funny and sad, at the same time.

If I am too skeptical for you, and others that read this, then please ignore what I have to say. But if you are familiar with the motivations of greed and what people will do under such motivation, then you will likely find truth in my words.

Good luck, and have a great weekend.

ReneSola: Secondary Offering Pressures Shares

Hi Zach: I found your blog (this is not an article) to be more about trying to create fear than being informative. Which tells me that you are not truthful, and very likely attempting to sway opinion to the negative so as to profit from a position. To wit, you use phrasing such as:

"the company along with several key shareholders, filed to sell about 8.15 million ADSs to the public"; and

"The stock is under pressure because it appears management is going to go through with the offering even though the price is much lower"; and

"I was at my desk scouring the news wires to try to figure out why SOL was quickly dropping when my phone rang. The call happened to be from a particular contact of mine from Oppenheimer which is one of the companies that has been hired to underwrite the deal".

Each of the above comments is designed to instill questions, not answer them, which is a prime tactic used to create concern and fear in the reader. Also, I challenge you to post the name of your contact at Oppenheimer who purportedly "called" you out of the blue just as you were mucking around for dirt on SOL. I hope you realize you are playing on the fringes of the SEC Insider Trading rules with this comment you posted.

Please refrain from thinking you can manipulate the "retail traders" with this sort of blogging. You, of course, are free to blog as you wish, but to do it in the guise of altruism is just not what your true motivation is. Plain and simple, you are just trying to make a buck, and you will do anything to skew the odds in your personal favor.

Have a good weekend.

Why Canadian Solar is the Best Solar Stock

Hi Jack: I appreciate your well thought out and comprehensive responses. When I have more time I will address the solar industry as a whole, and the companys that I see as the "winners". Suffice to say, while your analysis is "correct" in terms of crunching the numbers, when you leave out any sense of objective analysis of the management, performance history vs, estimates, market supply and demand drivers, and technological and capital (scale) competetive factors, then the analysis, is thin at best, and implies that all we need to do is crunch numbers (projected numbers, no less) on stocks and the results will be as good as gold. I do not buy in to that, which is why I criticized your analysis. BTW - I am not short CSIQ, but I am long a couple of other solar stocks for reasons that I will go into later (LDK, and EMKR).

Good luck to all,
AckerAnalytics

Why Canadian Solar is the Best Solar Stock

The revenue and earnings estimates for CSIQ are nearly 4x the projected growth rate for the solar sector as a whole. With that, CSIQ must "gain" or collect market share from the big boys to the tune of 4 x their rate of growth. And this is to be done on margins that to this point are negative to marginally postive. So if you believe that CSIQ, which is an "assembler" of solar modules - CSIQ does not make solar cells, they source the cells from the likes of STP, YGE, SPWR, etc. and assemble/integrate the cells into solar panels and stand-alone products - much like a contract fab assembles integrated circuits, you may wish to ask yourself how is CSIQ going to gain all that market share and increase its dismal margins, while it must source solar cells from outside the company.

Further, when CSIQ says "The company believes that it has contractually secured 90% of its silicon or cell requirements to support module production of 200-220 MW in 2008", it is important to understand what they are saying. "Believes" is a very uncertain word when speaking of contracts. What is in those contracts that makes them say "we believe" as opposed to "we have contractually secured....". And then, to go on and cite an unproven technology/means of reducing polysilicon usage as their "back-up" plan, the whole claim of sufficient polysilicon sources sounds very shaky.

Moreover, if you read the latest earnings report, almost all of their sales in the North America region were for sales of portions of their polysilicon supply. So what they are doing is, because of their low module assembly margins, they have used the rise in polysilicon costs to sell polysilicon inventory to boost revenue and earnings in lieu of making solar module products. Clever means of revenue/earnings recognition I might add, but I was of the thought that CSIQ is a solar module manufacturer, not a polysilicon trader.

Regarding analyst's estimates, it is very risky to take any analyst's estimates at face value, and when an analyst has numbers out on a second tier player that are 4 x the industry average, those numbers need more than three quarters of operating history to have a foundation for such optimistic forward projections. I would love to see Adam Hinckley's product breakdown projections for 2008, to see how he, or any one else could arrive at revenue growth of 2.4 x 2007, and earnings growth of 6.3 x 2007. These numbers are so out of line with the industry, there must be something that CSIQ is doing that no one else in the industry is doing, or perhaps, the numbers are just not justifiable. Maybe CSIQ is selling bizillions of their solar car battery charges?; or they have a secret stash of thousands of tonnes of polysilicon that they will sell to boost sales and earnings. Short of that, I just don't agree with the excessive growth projections, and frankly, I value my opinion as much as any "paid analysts" and more when I see things that are just darn wacky.

Good luck to all,
AckerAnalytics

Why Canadian Solar is the Best Solar Stock

This analysis, bravely so, is 100% dependent on future revenue and earnings estimates. For CSIQ, it's history of revenue and earnings growth is poor relative to its estimates. Based on its "underperformance" in the past, its low to negative manufacturing margins, and increasing wafer costs, the probability of CSIQ continuting to underperform, in comparison to its overly optimistic estimates, is more likely than CSIQ suddenly becoming a competetive, high margin force, in a landscape of much better capitalized and lower cost companies that have proven manufacturing margins and better control of raw material sourcing.

Simply put, CSIQ is a run of the mill "wanna-be" solar player, that is not capitalized sufficiently to expand rapidly and maintain sourcing of polysilicon at competetive costs CSIQ is likely to continue be a second tier solar play due to its higher cost/low margin manufacturing. Its most beneficial outcome, long term, would be to be acquired by a larger, more capitalized player in the industry. And in a sector that will see consolidation due to excessive and disparate capacity plans, and the need to reach grid parity through cost reductions, the major players will be valued primarily on their ability to lower costs, with the second tier players being squeezed out of the picture due to the inability to compete at large scale. With the prime success driver being low cost at large scale, and world markets likely to be very "selective" of who gets rewarded for cost control and real growth, CSIQ looks to be on the outside looking in.

When viewing analyses it is important to ask yourself if what is being said is true, then why is the market valuing CSIQ as a low quality player. And the reason is if we "cherry-pick" our estimates and numbers, we can make a forward looking case that is pretty darn rosy; but when the whole picture is viewed, that being past performance + market trepidation + future hopes, a more complete picture emerges, that is not quite so rosy.

Good luck to all.
AckerAnalytics

Will LDK Solar Repeat the Successes of Standard Oil?

Unforetunately, seekingalpha.com incorrectly posted Michael Sheffer as the author of this article. This article was written and submitted by me - Matthew Acker.

For those that have commented above, you missed my point. And the point being, that LDK is taking a calculated risk, that is against the grain and current convention. In the case of Standard Oil, this paid off handsomely. In the case of LDK, we do not yet know if it will pay-off. Which I clearly stated in the article, and is why, if you care to notice, the article was composed in the form of a question, not as a statement of fact.

And, specifaclly to the person from CMR, you may wish to do due diligence before you go about exposing your ignorance. At least then you would have some semblance of credibility, as opposed to emotional ramblings.

Is Sohu.com Overvalued?

Ho Rob: Yes it is a good thing you are/were long SOHU. I stand by my assessment that SOHU is overvalued; but that does not amount to much in the face of the momentum push it has received.

The earnings numbers were better than I expected, and that is a credit to the diversification of SOHU into gaming. If SOHU did not have the gaming revenue increase of nearly $12M, then the quarter would have been a disastor. Again, this is to the credit of SOHU. However, the gaming market in China is very fickle, and there is no guarantee that SOHU will continue to bolster it's overall revenue with gaming revenues.

But, alas, SOHU has proven me wrong this quarter. Although, even those who are big believers in SOHU, must be looking at the current run-up in valuation, and asking the same question I posed - "Is SOHU.com Overvalued?"

GL

Why Lazard is Wrong About LDK

Hi "semi-expert": Please feel free to refute my comments with those of your own. To say I know nothing is not an argument for/against my points, but simply an "attack the messenger" slight that only indicates you are unwilling to respond intelligently.

Please respond intelligently, with point-by-point arguments that show why it is that you say to me "you don't know nothing".

Thank you,

Can Housing Be 'Rescued'?

Hi Barry: I have made the same comments, and cautioned many people over the last few years that the housing market is unsustainable, for one simple reason, and that is "affordability". Very few listened, and many said to me "you're wrong - you should buy, too".

Now these same people are crying the blues and pleading with the government to "help us". And Congress, in its infinite shortsightedness, will likely aid these people, who, as you pointed out, could never, in the first place, afford the homes they bought.

And then we have Larry Kudlow, CNBC - who loves to boast of the wonders of the free market, that is when it's lining his pockets - crying for government bailouts and Fed rate reductions. His crys for help, are of course self-serving, as he and his Wall Street buddies are up to their ears in leveraged asset backed securities. And, by the way, where is Larry when we try to lend a hand to the poor and needy, and those who need assistance for education. Not a peep from the greed-meister then. And this guy calls himself a "free market economist" - not true, he's just another big mouth on TV.

At any rate, thanks for your straight-up speaking of the real problem with housing. I hope that indeed the free market forces are allowed to play out - as that is the only way that the market will correct with true functionalilty.

What LDK's Management Must Do - Immediately

Ben: Thank you for your comment. I am using the term "white-paper" to define a policy document (in this case process policies) as opposed to a scientific disposition.

Your point is very valid, in terms of the importance of LDK maintaining proprietary, competitive advantage, information.

LDK Solar: Wall Street's 'Crash and Bash' Scheme

Hi "grid..." "Transparency" - please understand, the word "transparency" is a business/political synonym for "look this way". I am sorry to call you on this, but it is naive to think/believe that there is any real true view into the board and conference rooms, the coffee conversations, and the "remember that favor" phone calls, that would be let by way of "transparency".

Plenty of bold-faced lies, to be sure; and lots of "feel good" verbage, and big smiles thrust on us; but truth?, no my friend, in the name of transparency, we will not find truth.