Solar Stocks Interview with J Peter Lynch Discussing Portfolio Performance and Key Trends
Point Roberts, South Salem, New York –August 25, 2011 www.Investorideas.com, a leader in cleantech stock research, releases a recent Q&A interview with regular solar stocks columnist, J Peter Lynch.
Mr. Lynch discusses his performance in his solar portfolio and trends in the sector moving forward.
Peter, in the volatile market we have all gone through recently, your solar stocks portfolio realized some significant gains . Can you give investors some hi- lights of the overall performance and where it stands now ?
A: J Peter Lynch
Our solar portfolio significantly outperformed the major indexes in both 2010 and YTD in 2011:
In 2010 we outperformed by 310% with a gain of 42.94% vs the markets average gain of 13.87%.
In 2011 we sold the last of our positions at the beginning of August and closed up 16.52% YTD vs the markets being down an average of approximately 6%.
Currently we are on the sidelines and feel that the current market may well be a correction at the beginning of a bear market. We will keep you informed but with this current market and its volatility this no time to be fooling around with stocks that are ALL in serious downtrends.
I have read that Italy is poised to move ahead of Germany in the PV market – can you give us your insight as to what you see developing ?
A: J Peter Lynch
I have heard that too. But Germany is the strongest country in Europe by far and their Feed in Tariff program (NYSE:FIT) has proven itself over the past 5 years. Germany will stay the leader for the foreseeable future. The only mystery to me is why the USA does not follow the proven German approach – the FIT – that has already been copied in one form or another by 40 additional nations.
What do you see moving forward for the industry in terms of growth of installations and costs coming down?
A: J Peter Lynch
Industry margins are under pressure, as I predicted in mid-2010. I am hearing quotes from some Chinese solar companies that make me wonder if they are selling at a loss. We need the federal grant program to be extended at the end of this year, although I am hearing that it is not going to happen. What we really need is a nationwide FIT program if we really want to say we are serious about renewables. We will also need more flexible and available financing programs to enable companies to accelerate projects.
There have been some recent upgrades in the sector recently including First Solar, what are your thoughts?
A: J Peter Lynch
My thoughts are to wonder what they are looking at – to put it very simply – FSLR is NOT a buy here unless your hobby is catching falling knives. The stock is in a strong downtrend and until it shows some positive signs of life it is not a buy for anyone except a serious focused trader.
Take a look at the graph below – does this look like a stock YOU would want in your portfolio? Also today was a strong day on the market and the stock traded down a sign the trend has not reversed.
For investors that are still long solar stocks or for new investors looking for an entry point what are your thoughts?
A: J Peter Lynch
If you are holding stocks they are more than likely very oversold and at least due for a bounce, which you could use to exit. If you are looking to initiate new positions you will have to be patient and wait for the current volatility to calm down and solar stocks to start to show signs of life. Remember, no investor, will consistently buy a stock at the absolute bottom or sell a stock at the absolute top. What the savvy investor wants to do is to maximize his or her return while at the same time minimizing their risk.
This is exactly what we did in 2010 and 2011. In 2010 we achieved our superior returns with ZERO trades that year. In 2011 we started out well, but we sold out of our positions whenever they violated our criteria thereby letting our profits run as long as we could and then minimizing our downside losses by selling positions as they violated the rules we had set. This strategy once again allowed us to significantly outperform the market YTD in 2011.
Read Solar Stocks Commentary with J Peter Lynch at Investorideas.com
Read Peter’s technical solar stock reviews:
Mr. Lynch has worked, for 34 years as a Wall Street security analyst, an independent security analyst and private investor in small emerging technology companies. He has been actively involved in following developments in the renewable energy sector since 1977 and is regarded as an expert in this field. He was the contributing editor for 17 years to the Photovoltaic Insider Report, an early publication in PV that was directed at industrial subscribers, such as major energy companies, utilities and governments around the world. He is currently a private investor and has from time to time been a financial/technology consultant to a number of companies. He can be reached via e-mail at: SOLARJPL@aol.com. Please visit his website for the promotion of solar energy – www.sunseries.net.
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