constantnormal

The Solar Energy Market Has Bottomed

Davewmart, the thing that is hurting the residential solar market is the fact that there is no residential housing market. If new homes were being built at the rate that they were in 2005 or 2006, instead of having a huge overhang of unsold houses, even a small fraction of them going rooftop PV would provide a lot of support for the solar industry.

But the reality is that nobody is building a lot of new homes today, and without folding the price of a solar roof into the mortgage, one has to fund the entire nut up-front. And with the lenders being as fight-fisted as they are today, that means coming up with it out of your own pocket.

When you look at the cost of a rooftop solar facility, and slide it into a 20 or 30-year mortgage, it's really not so much, and probably cuts the electric bill enough to make it a sensible thing to do (to know for sure one would need specific figures, and do a time-value-of-money calculation using the mortgage rate against the increased principal amount, vs the utility savings).

The "high cost of solar" is not the thing that is keeping it from the residential housing market, it's that there is no residential housing market to speak of.

As an alternative (and very real) example, suppose there were a new shingle developed that changed color between dark and light with ambient temperature and light, so as to collect heat in the winter and reflect it in the summer. Further suppose that these magical shingles cost 20% more than conventional shingles, but cut the annual energy cost by 1%.

In today's housing market, just how many homeowners would be ripping their existing roofs off to replace them with these "mythical" energy-saving shingles?

But in a robust housing market, how many contractors would be using them in all the new houses they were building?

The problem in this case, just as with today's rooftop solar, is not that the product is too expensive, it's that such things sell better into homes at the time of construction, and we're just not building many new homes these days, and certainly not lending money for home improvements.

Top Apple Analyst Muddies Black Friday Results

Regarding Gene Munster's team of Apple-watchers ...

3 stores is not a lot of them, and with such a small sample, where they are located probably means a LOT (with high unemployment areas likely experiencing significantly lower Mac sales than the few still-booming areas -- contrast Detroit and Austin Apple stores. The confidence level of extrapolating data collected from three store to company-wide results is pretty low.

I think that his methodology is perfectly sound, but it's likely a case of not enough samples. Covering 12-20 stores, split between foreign and domestic locales, and distributed across a wide range of economic backdrops would give more reliable data.

And I suspect that every analyst counting the number of packages exiting the Apple Stores could stand to improve their own methodologies along those lines. More samplings, paying attention to geography and economic conditions, would give more consistent and more accurate numbers all around.

But that sort of thing takes time and money, and the temptation is always going to be to skimp on the data collection, plastering over the deficiencies with prose and numbers.

Global Warming Models: 'Out of Order'?

To the oft-chanted "why isn't it getting warmer?" crowd, I ask, how is the global ice pack melting if it's not getting warmer? When you drop an ice cube in a beverage, does the beverage get warmer? The answer is that the combination of the liquid and frozen water DOES get warmer, despite the liquid fraction becoming cooler in the short run.

When you can explain to me how the thermodynamics of a glass of water + and ice cube does not yield a net increase in temperature over the sum of the two items considered as separate items, then you are in line for a Nobel prize, as you have just negated the 2nd and 3rd Laws of Thermodynamics.

People expecting the global air temperature to immediately rise when we are melting the ice pack into the oceans, briefly dropping the temperature of the oceans while we erase the ice packs and RAISE the overall global temperature are missing the point that it is a large and complex system -- looking at one part of it tells you nothing. And people who think that because the air around them is not immediately heating up while we melt the icecaps, that there is no global warming are similarly deluded.

Idiots abound in the global warming controversy. More proof that there is no intelligent life on this planet. A self-correcting condition, as it were.

U.S. Government's Size: The Slow-Motion Crisis

In 1900, most of the US did not have modern septic systems, they had outhouses, and most died early from diseases that are treatable today. Most local transportation was on unpaved roads via horse and wagon. Electricity was mostly a laboratory curiosity, only just beginning to make its way into daily lives.

So yeah, let's all return to the glamorous days of the 1900s.
Check your keyboard at the door.


On Nov 23 07:34 PM Liberty wrote:

> In the year 1900 the total US federal spending was only 3.0% of GDP.
> There was not even a need for an income tax during this time. The
> US government spending fluctuated between 2.15% and 2.87% of GDP
> until 1913 when the current federal income tax largely came into
> being. Since 1913, the federal government has grown to about 28%
> of US GDP in 2009, with govt. spending peaking in war years. <br/>
>
> The early 1900’s was the golden age of America, when the following
> inventions occurred.
> • The Wright brothers invent the first gas motored and manned airplane.
>
> • William Coolidge invents ductile tungsten used in lightbulbs.<br/>• Benjamin
> Holt invents a tractor.
> • Albert Einstein published the Theory of Relativity
> • Leo Baekeland invents the first synthetic plastic called Bakelite.
>
> • Color photography invented by Auguste and Louis Lumiere.
> • The very first piloted helicopter was invented by Paul Cornu.<br/>• Model
> T first sold.
>
> I believe the best thing for the US would be to dial back its spending
> to less than 10.0% of GDP, and let the private sector handle virtually
> everything, just as it did so incredibly well before the income tax
> changed everything.

U.S. Government's Size: The Slow-Motion Crisis

While a smaller non-performing government is better than a larger nonperforming government, what I am missing most in all this is any recognition of the need to make government BETTER, whatever size it is.

The septic inspection example is an excellent one -- as the author notes, there is certainly nothing wrong with requiring that septic systems be provably good. What's wrong is the idiotic laws that peg the inspection process to at the point of sale, rather than on a once-a-decade basis, or some more sane metric.

And the blizzard of insane laws does come more rapidly when the government is larger, but the primary problem is not the size of the government, it's the quality of the legislation, and how difficult it is to get bad laws corrected. However, I may be naive in not explicitly recognizing the influence and corruption aspects in our system of government -- it may be unavoidable that our laws are mostly paid for by the lobbyists and written only to serve special ionterest, and not the public good. In that case, smaller government is the only answer, with the target being the dissolution of the US of Bananamerica, and the formation of a tribal system of government, with small communities at war (or in an uneasy peace) with their neighboring tribes, as much of the MIddle East is today.

Surely there is a middle ground.

Can Apple Stop the Android?

All of what passes for "analysis" of the Apple vs Android battle neglects to consider the pace at which the underlying hardware is developing. Consider Apple's acquisition last year of P.A. Semi, in this regard. It seems likely that Apple's future iPhones will advance faster than those based on commodity hardware, and will utilize custom hardware to accelerate various parts of the architecture. The Android, targeting a wider spectrum of hardware designs, none of which can take advantage of P. A. Semi's custom hardware -- but which each may develop their own custom hardware, and how will Android support those?

The ability to take advantage of new hardware and keep their smartphones at the bleeding edge is what will determine the overall winner in this war, not whether one or the other is more "open" or "closed".

One could easily look at the Android and conclude it is the "more closed", in the comparison between the various Android phones and Apple's iPhone, based solely on the number of "apps" available for each.

And given the wide variation of Android implementations, across a number of different vendors' hardware platforms, can we say with any certainty that a given Android app will run on all of them (I don't know, and am merely raising the question)?

Also, the above "analysis" would have one to believe that Linux has taken the lion's share of the PC markets, and has brushed both Apple and Microsoft -- those old world closed architecture dinosaurs -- into the dustbin of history.

Edward should stick to the credit markets. The question of who will dominate the smartphone markets (and eventually, the cellphone markets, as the cost of hardware declines) is far from settled. At this point, looking at what Apple has done to date, one would have to regard it as the safe bet to win.

Hopefully, Android-based smartphones will continue to do well, and because competition improves all the breeds, I hope it will be adopted as the alternative platform to Apple's iPhone and prosper.

But I believe that Apple will prosper more.

IEA Report - Trouble for Oil ETFs?

Projections that are 20 years out are nothing but fantasies. Nobody can accurately project anything, in any area 20 years into the future.

There are so many status quo assumptions built into this projection that will ultimately be toppled that it is ludicrous. Technologies change, markets change, the global economy changes. And so far as global warming goes, who's to say that a decade from now some process to actively suck greenhouse gases out of the atmosphere will not emerge, that happens to use oil as a working medium? I can indulge in ridiculous fantasies just as much as the IEA.

The IEA is first and foremost, selling advice to rich oil-producers, so one would expect that advice to be heavily tailored to what their customers want to hear.

S&P 500's Top Returners in 2009

It would be nice see how the "valuation model" used to assess these stocks compares to things like PEG and price/(free cash flow per share).

Just tossing out the results from an ill-defined black box does not engender any confidence in me -- looks too much like a fund that is "talking its book".

Will The Federal Trade Commission Have an Issue with Apple and Google?

The obvious defense is that Apple is a hardware company whose software is (for the most part) restricted to its hardware. Google is an advertising firm, and also heavily into software (as an advertising medium), none of which is restricted to Apple products, and some of which competes directly with Apple.

Kinda tough to derive any antitrust benefit from those profiles.

Apple's Valuation: My Stance

" ... So I'm going to shy away from drawing estimates for 2010, but I openly welcome thoughts on what 2010 might bring and the supporting arguments leading to such conclusions."

" ... I think 2010 will be significantly better than 2009 ..."

OK, so which is it? I take it from your latter comment, that you believe this recession is "only" a recession, and that it will definitely be on the wane by 2010.

OTOH, IF this is something deeper and more structural (we call those things "depressions"), with unemployment and home foreclosures continuing to squeeze the global economy smaller and smaller, then 2010 could see increasing pressure on AAPL's customers, constraining their ability to buy products.

We have yet to hit the single-digit PE multiples characteristic of bottoms in extreme downturns, so there is a reasonable prospect that AAPL will continue to see its outstanding operating performance (which I fully expect to continue) rewarded rather weakly in the equity markets.

Revising Apple's Outlook in Line with Reality

Just what do you guys mean by "long-term"?

If you are talking "long-term" as in long-term capital gains, then Andy should take his profits now, before the bear-market rally gives out and AAPL sinks (along with everything else -- slower, but sinking just the same) as PE multiple compression drives valuations toward the single-digit regimes that occur at real bottoms.

Of course, if you are talking "love-of-my-life" long-term, well then you are correct and nobody should ever sell a well-run profitable company that they are in love with, certainly not over a small thing like losing money.

There were people buying at the top in 1929 (and 1937), some buying excellent companies (at inflated values, considering the impending future) and it took decades for them to break even.

There were people in love with gold, back in the 70's, and it took 30 years to regain the levels they loved it at.

Buying a stock for love can blind one to the fact that even the best-managed, most profitable companies can have their stock prices suffer for a very long time, if the larger market environment is bad enough. The name of the game is not to own the best stocks, it is to make money owning them. Those who forget that (or have never learned it) are doomed to be parted with their money.

4 Possible Market Scenarios

Tech companies may be "swimming in money", but most are only knee-deep in revenue -- possibly soon to be ankle-deep.

If you can envision a recovery where the consumers get renewed confidence that their jobs will be around, and have the bulk of their debt paid down, maybe you can project ahead to when the revenue picture improves for these companies.

Until then, the declining revenues are likely to provide a number of air pockets for these high-flying stocks.

Buying cash-rich tech stocks because they are cash-rich is not a sound decision in the face of massive future uncertainties. The only thing that is (nearly) certain is that these companies will survive until the next boom. AAPL could almost certainly withstand the financial collapse of the United States, but that does not mean one would make money owning it.

If you want to gamble on a recovery emerging because stocks are rising, you may as well buy housing stocks or TBTF banks. The returns for them are likely to be much greater in a recovery scenario.

Not so much if the recovery does not materialize.

I would be watching for large-scale insider buying at these cash-rich tech companies as a sign to acquire them. I have not seen any signs of this yet.

1100 Tonnes Now in the GLD Trust

It should probably be recognized that while GLD is "bullion-backed", that need not necessarily mean that they have 1100 tonnes of bullion in a warehouse. For example, they could have futures contracts to receive 1100 tonnes of gold, and no physical gold, or an actual 1100 tonnes of gold, or any mix in between. The thing to understand that GLD is not a substitute for owning physical gold, it is a substitute for participating in the price movement of physical gold, and as such, should be thought of as a form of derivatives contract, much the same as futures contracts or options, structured across various prices and dates so as to achieve the desired price relationship. But it differs from options and futures contracts, in that there is no expiration date.

Here's a link to a page regarding the GLD fund, and their auditability:
news.goldseek.com/Jame...

I think that so long as one recognizes the ETF for what it is, one should have no problem whatsoever making money using it.

If however, you are a goldbug wingnut, intent upon amassing a horde of the yellow metal along with adequate stockpiles of bullets and bottled water, eagerly anticipating the Libertarian Rapture, then GLD is clearly not your cuppa tea.

Just be aware of what you are buying and why you are buying it. If you are looking for a hedge against dollar depreciation in times of inflation and currency panic, then GLD should do the job at a very low overhead, as compared to the generous markups of buying gold coins or managing secure storage of bullion.

1100 Tonnes Now in the GLD Trust

oops. Apparently I'm not so good at the math either. Should be 71 pallets of a thousand bars each, not 7. Still, it's not that much physical space, and there is little danger of theft due to the difficulty of moving the stuff. (You're not going to haul it away in a fleet oF Mini-Coopers)

As to where it comes from, there are a bunch of mining companies all over the world, where do you think they sell their product?

1100 Tonnes Now in the GLD Trust

User 325302 -- have you ever calculated how much physical space it takes to hold 1100 tons of gold bars?

The standard gold bar is 7" x 3.625" x 1.75" and weighs 30.94 lb
[www.elmhurst.edu/~chm/vchembook/125Ade...

1100 tons = 1100 x 2000 lbs = 2.2 M lbs = 71,105.36 gold bars, or about 7 pallets of 10 bars wide x 10 bars deep x 10 bars high or 7 pallets that are 70" x 36.25" x 17.5"

It's not that large an amount of physical space. Do the math.