Chad Brown

Solar Sector Makes Its Way Back into the Light

Out of curiosity, I went back and checked how this investment recommendation worked. The answer is it was a failure. To 11/25/09, STP is flat and the other two are down. Not only did STP fail to make the 50% upside move that this author predicted, but it did a little worse than FSLR and SPWRA, at least until about early November 2009. Looking at the very short-term as this author was doing, all three solar names fell sharply by Sept 1, 2009. I have never been a technical analysis fan, but every now and again I do a test to see if I might be missing something.

Trina Solar Ltd. Q3 2009 Earnings Call Transcript.

The solar industry is still reliant on subsidies although it is rapidly approaching the day when the panels will go where the sun is (like southwest US or Spain) rather than where the subsidies are.(like Spain in 2007-08 or Germany in recent years). So the key issue for most solar companies is what will China do regarding a feed-in-tariff. Therefore the single most important Q&A exchange in this transcript was probably the following:
====================
Sanjay Shrestha - Lazard

One last question guys anything you guys could share with us in terms of what is the NDRCs view on the national feed in tariff could we still expect to get [that] before year end or is that more of a March 2010 event?

Sean Tzou

I think it’s everybody’s question and we certainly are hoping the government will be able to come out with feed in tariff by the end of this year, but it will be more likely to be early next year at this moment.
=======================

First Solar's deal to supply panels to a big project in Inner Mongolia is contingent on a Chinese FIT. If China does not implement FIT, I believe FSLR does not have to supply panels.

Keep in mind that the solar industry is, at this still early stage, more about various countries competing with each other to create local solar industries that can compete internationally, rather than about various companies competing to supply cheap electricity to local consumers.

Of course, the other really significant thing about the Trina quarter is that they produced a much better than expected result, even without the 11 cent FX gain. No one on the call asked them if their customers were buying to beat the anticipated drop in demand in Germany when the German FIT will drop at the end of 2009. Of course, they might not even know if that were the case.

Senator Schumer Misses the Full Picture on A-Power's Joint Texas Wind Farm

By opposing the Texas wind farm on the grounds that a Chinese company is supplying the equipment, despite the fact that China is also supplying part of the financing, Senator Schumer is taking too narrow a view of the interests of his constituents. As a New York State resident, I am one of his constituents.. I prefer to live in a (future) world with cheap and clean (no-carbon) energy. I would like to see companies compete globally to supply such energy as that will drive down the cost. I am willing to accept that subsidies for renewable energy sources are necessary at least until a system can be put in place to put a price on carbon, since as long as carbon emissions are free, fossil fuels are in effect getting a subsidy. I would like to see Chinese (and other) manufacturers winning some of the US projects and US and other countries winning business in China. I realize we are a long way from such a "perfect world". But unless Senator Schumer is trying to use this Texas project to get some leverage to push China to open up its markets more, then he is not representing my interests. Surely Mr. Schumer could find better ways to spend his limited time. After all, the US Senate's deliberations on climate and energy legislation seem to be holding up progress in the rest of the world.

Is There an Opportunity in First Solar?

FSLR is not a stock that can be evaluated using tools like PEG ratios, as this article tries to do. Having just returned from a solar trade show in Anaheim, I can report with some conviction that is is not at all clear who the "winners" will be in solar. FSLR is the market's "pick" to be the biggest winner. Certainly FSLR has the best past growth rate and the highest margins, and that might be a useful sign if the market were more mature than it is. The real question is which solar technology will emerge over the next several years as the most cost-competitive, and the past growth rates do not hold the answer. The volatility in the stock surrounding whether the sales number was above or below expectations, and the volatility in sales arising from the timing of the signing of a single sales contract suggests the market is focused on the wrong metrics for this stock.

Solar Declines in Price by More than 30%, But Don’t Credit the Panel

The headline on this post is very misleading. The study came out in early 2009 and is not a "new" report. It has gotten a lot of attention. Ryan Wiser was the author. The period covered is only through 20098. During 2008 the real price declines began and were very much in evidence in panels. Prices at the manufacturer's level fell 30% to 50%. Drops is silicon costs were the key source of the cuts, but so was the virtual disappearance of profit margins for many of the module makers. So first off, it is too late to report on this study. Second, a report on solar prices published today should focus on how big a price drop there was from the peak in Q3 08 to the first half of 2009.

Galleon Group's 50 Largest Holdings

SEC rules require disclosue of longs, but not of shorts. Also, the rules are limited to US stocks. Foreign holdings exempt. That is why you don't see shorts included in the holdings. Abnd of course the holdings could have changed since the reporting date.


On Oct 18 10:57 AM PelicanBill wrote:

> Interesting list of stocks - I don't see IBM? Also, since it is a
> hedge fund, which are longs and which are shorts, or better yet,
> where are the shorts? Would those shorts be considered good "long"
> opportunities?

Recent IPO First Solar is Overvalued Relative To Its Peers

well that short on fslr did not work out so well. With hindsight, the key was that the CadTel thin film technology was fundamentally better than Evergreen and SunPower. Not something that shows up when you compare revenues and losses for past quarters.

Where Have All the Peak Oil Believers Gone?

The poster shown below was one of the exceptions who seems not to believe in Peak Oiil. Curious to learn why, I followed up on the suggestion to learn what "Dave McGowan" has said to undermine belief in "Peak Oil". I quit after I read the first of a series of posts in which Dave tells us that NASA faked the Apollo moon landings. Really. check out:
davesweb.cnchost.com/A...


On 2008 Nov 11 11:05 AM hANOVER fIST wrote:

> "Peak Oil" is a complete and utter falsehood.
>
> Was there any significant difference between the $147 oil and today's
> $60 oil?
>
> NO.
>
> Do a search for hANOVER fIST and Peak Oil - then read DaveMcGowan's
> take on it...along with my own independent research, I think that
> anyone with a brain can come to the conclusion that "Peak Oil" was
> simply a money grab for the Monkey King's boys on the backs of the
> gullible.
>
> "Fossil fuels", indeed!

Where Have All the Peak Oil Believers Gone?

I was searching for articles by OPPONENTS of peak oil. There are very few of them. This post by Babak, because of its title, seemed to be one of them, and so I looked more closely. I turns out Barak has not really done any actual study of the oil supply-demand balance in terms of fundamentals. Rather he is a technical analyst. He thought the price drop as of the date of his post (from peak $147/bbl to November 2008 in the $60's) would cause peak oil believers to change their views. As the almost-universally disagreeing posters made clear, they did not change their views, and the peak oil theory that most adhere to does not predict steady price rises. Peak oil is about declining production long-term, not about prices only going up. Babak was also convinced on technical analysis grounds that the price of oil could not fall below $40 per barrel because that was a "long-term support area". The price fell to the $30s although it has since rebounded and was only briefly below $40, and so the $40 floor was not such a bad call. Whether he was right or wrong, and if right whether it was luck or skill, is not relevant to the question of whether the world is faced with Peak Oil. The posters to this thread are not a scientifically unbiased sample, but this post did atrract far more than the average level of interest, and most posters seemed of the view that oil production will eventually decline.

Power Inverter Stocks: A Back Entrance to Solar and Wind Energy

SMA is now public following a June 2008 IPO, after this post was written. But the founders have over 70% so not so much in public hands. Xantrex, also mentioned, was acquired. The inverter area could use some better technology. It is the biggest part of the Balance of System costs depending on how you count.

Climate Change: How to Invest for the Possibility

"I am not a climatologist – just a rational man who respects the empirical process.

You say your are not a climatologist but that does not seem to stop you from knowing the answers to the questions that climatologists study. Can you do that also with medical problems? (Perhaps I could save on my medical bills with you.) How about foreign policy issues? Can you translate ancient languages? I guess scientific questions would be a breeze for you given your respect for the empirical process? Are there any areas where you don't have all the answers? Also, do you need to know the questions first, or is that just a waste of you time?

The Alternative Fuel Vehicle and $300 Oil

disagree on this. Economics courses teach that markets do the best job of allocating scarce resources. Not govts. You need govts to step in for some things like parks and streetlights. Oil does not meet the criteria to qualify as a "public good"


On Aug 30 10:24 AM Ferdinand E. Banks wrote:

> Good article, except for the business about favoritism or politics.
>
>
> The US turns out tens of thousands, maybe hundreds of thousands of
> econ students every year, but only a very small fraction have read
> the last chapters of their econ books. If they read them, and genuinely
> thought about what they read, they should come to the conclusion
> that energy should be a public or near-public good like parks, streetlights
> and crazy wars thousands of miles away. Accordingly, governments
> would make it their business to be intelligent governments, and select
> the right energy option. The right energy option is a diverse energy
> portfolio, with nuclear energy playing a key role.

Suntech Exec Corrects: Not Actually Selling Below Cost

The anti-dumping rules are incredibly complex. Newspaper reporters are not likely to know all the subtleties about how dumping is defined. I wonder if even the CEOs fully understand. I don't calim to understand, except that it is not as simple as one might think. My gues is Suntech's lawyers saw the quote and told him to retract it.

Solar Competition Heats Up

copper mining is changing? how so?


On Aug 26 10:19 AM Fred W wrote:

> FSLR can't win in the long term...CdTe will just cost too much by
> 2011...Copper mining is changing and less CdTe will be available
> as a result--at the same time FSLR continues to grow capacity and
> required supply of these rare elements...FSLR relies on "solar farms"
> for the majority of its business so you first and last sentences
> are in opposition.

Chevy Volt: How It Stacks Up

EPA should take an estimate of the average price of electricity and the average price of gasoline looking forward for five years and use them as inputs to the calculation. Also use the cost pf the car and amortize it over the life of the car. All that goes into a cents per mile calculation including the cost of the car, the battery, and the fuel.