Two Large publicly traded Solar companies are booming

If you look at the last 200 days, LDK and JA Solar have skyrocketed. But if you look back two years, they're not so hot. (On the attached chart images, the red line is the Dow Jones Industrial Averages, the green line is JA Solar, and the blue line is LDK.)

I take it as good news that the market is favoring these kinds of companies, but note that they are both WAY down from two years ago, much further down than the Dow. Of course if you had bought them 200 days ago, and sold them now, you'd have made a killing. But it's impossible to know whether this spike is transitory, or an indication that the companies are rebounding to their pre-crisis levels. Note that even before the big drop, these companies were much more volatile than the Dow.

I would consider them high-risk investments.

I own several mutual funds that invest in renewable/sustainable energy. That's my way of supporting renewables, without the high risk of buying individual volatile stocks.

In my opinion you should never buy individual stocks unless you really understand the market and have done serious research, or you have an advisor or broker who you really trust, or you like to gamble and can afford to lose your investment. But as an individual and a market outsider, your odds are better in a casino at Las Vegas than speculating on individual stock issues.

Just my opinion. Others will have different opinions.

 

I would think that the demise of prop 23 in Ca gave a boost.

 

*cough* *cough*

Might as well look for a pink zebra that is fluent in chinese.

 

In which case, my advice is to stay away from individual stock issues.

 

Rather than buy stocks, why not put up solar panels / wind power? I wish I owned instead of rent, so I could do that. (Sighs whistfully.)

 

The thread was about the stock prices of two companies, which have spiked recently. Some folks might see that as an "investment opportunity." I replied that such investments are very risky.

When you buy existing stock issues, you are not promoting anything. You are investing your money, either as a short-term speculation, or as a way of saving for the future. But the market favors the insiders, so I always recommend mutual funds rather than individual stocks.

If you want to do something for the environment, and cut your own energy bills at the same time, put up solar panels, wind turbines, etc., as you suggest.

But it's apples to oranges: A well-balanced portfolio is an investment that will grow over time while producing some income along the way. In 30 years it should be worth several times its present value. A PV or wind installation produces energy now, but in 30 years probably will be worn out and have to be replaced. Two very different things, and not necessarily either/or.

Depending on your location, PVs or a wind turbine can be a much better investment, and much more reliable. But as you point out, not everyone is in a position to install them. Also, the payback is gradual. Stocks can be sold when you need money. Your solar or wind installation cannot be sold unless you sell your house, and whether you'd get your investment back would depend on the housing market.

So, very different things. Only one of which was the topic of this thread.

 

Small scale wind is notorious for under-performing - you simply need big blades high up in the air to get good power unless you live in a very windy area. Small scale turbines also have a reputation for being very unreliable.

Solar on the other hand, is very easy to predict it's generation and with no moving parts, tends to be very reliable.

I have yet to see a solar install that has underperformed.

Yes, it's unfortunate that people without proper roofs aren't able to capitalize.

Hopefully community solar efforts take off - that's where you (and a lot of others) buy a small stake in a larger PV farm located in a much better location and the electricity generated by your stake is deducted from your electricity bill. You should also have the benefit of economies of scale - larger installs are generally cheaper per watt to install/maintain. Now anyone with a bit of cash can buy their own solar power.

Getting the utility companies to agree to these setups and modifying their billing systems to cope is an uphill battle, though. I doubt we'll see it until is is required for them to do so by the govt.

 

One can actually invest in PV/wind/Re without putting it on your own house, through Solar Co-ops, as well as through many local utilities. In fact, your investment in solar is much likely to go further if you invest in a solar farm that has ideal exposure as opposed to your own roof top that probably has compromises with exposure. Additionally, you get the benefit of economy of scale. For example, Say you spend $20k on Pv for your house, it might buy ~ 2.5 kw of power. Buy that in a central co-op and it might buy ~3kw for example. The net effect on the environment is the same if you have it on your roof, or in a central co-op,, probably even better.

Icarus

Drees and I are saying the same thing,,as he posted while I was writing!

Do a google search for solar co-ops, or community solar.

 

Some folks up the street from us put an array on their house and the company that installed it sells the power to them for less than what the utility charges (not sure exactly how much cheaper). This seems to be a growing trend as there are a number of outfits in town that are offering this. It makes a bit of sense right now because a lot of folks don't have the capital necessary to get up and running (even with the state's rebates). In the long term it's not as good as owning the array outright, but I believe that the power agreement is for a quite a while, so they are insulated from rate hikes.

 

I had never heard of these solar power co-ops. I like the idea! The down side is (as Tripp points out in a slightly different context) that a lot of folks don't have the capital. In fact, there would be nothing to prevent coal-fired electricity co-ops, except that ordinary folks don't have the capital.

Actually, I belonged to a coal-fired electric co-op when I lived in N.D. My electric utility was the Cass County Electric Co-op. Technically it was owned by the customers, though I believe it was the government that got it going, at a time when rural N.D. didn't have electricity. In fact, it was run by a bunch of reactionary businessmen.

The scheme that Tripp mentions above also sounds like a good idea, for people who lack the capital to solarfy (solarize?) their homes.

 

Daniel,

http://www.nwsolarcoop.org/

http://en.openei.org/wiki/Northwest_Solar_Cooperative_-_Green_Tag_Purchase_(Idaho)

You can also buy green power direct from your utility which in turn funds it's production

None of it is as "sexy" as having your own PV on the roof however. Once people get the idea that they can get more bang for their buck. ( and that buck can be small) then the idea of small "investors" in co-ops might grow.

 

I think that the key solar rebates. This cuts the installing company's costs quite a bit. Since they don't need to make their profit in one go, I think it allows them to offer lower electricity rates. Seems win-win. It will be interesting to see where this leads.

 

Actually, I cannot. I called my electric utility. Turns out they don't have a "green power" option because all their electricity comes from hydro and wind already.

I couldn't figure out what the second link above is. NWSolar Co-op appears to be closed.

 

Individual stocks are fine if you want to own a company. That is the intention of stock. This implies that you have intimate knowledge of the company and want to participate in the management of the company. If you don't have that, then all you are doing is speculating, and in that case owning individual stocks can be disastrous.

We have some individual stock left from my grandfather's employment. It is a bank stock, and was completely pummeled during the big bank debacle. The main individual stock that I own is for my corporation. I own it, so I own the stock.

Tom

 

One other case: You like a company so much that you just want to feel that you own a piece of it. I own a few shares of Toyota because I liked the Prius so much that I wanted to feel that I was a part of it, and Panasonic, which made the batteries. I had no expectation that I'd make any money on either of them, and I have not. It was a purely sentimental purchase. I would not dream of investing any significant amount of money in it, nor would I imagine that I could make money from it just because I like the car.

At some point I'll probably get tired of it and sell them. I'll probably lose money, and I'll definitely be behind where I'd have been with a bank CD. But I won't lose much because it's only a few shares, and it will have been worth it for the fun of having owned a piece of the company that made my car.

 

Start you own solar coop. Gather like minded folks, find a spot, (how about the roof of your local shopping center, pool you money and away you go. Really all you need is a grid service/connection.

 

Emphasis mine.

I have no social skills. Hell, I cannot even "gather" one like-minded female to share a life of leisure. How do you expect me to convince enough people to invest enough money to build a solar installation?

I was in a local group of Amnesty International long ago, and the main organizers moved away. Those of us who remained tried to "gather" enough people to keep the group going. We failed. I tried. We tried. We lacked the skills.

I was in a bicycling club during the brief period when I was able to ride a bike. I could not even organize a group ride.

When I was active in the peace movement I did a lot of behind-the scenes stuff: stuffing envelopes, office work; and I went to all the demonstrations and I did nonviolent civil disobedience. But when I tried to organize an event, it was a flop every time.

It takes social skills to convince people to buy something, or to invest in something, or to join something, or to participate in something, or even go to a movie together.

So if a solar co-op in Spokane depends on me, it ain't gonna happen.

 

I do understand, but one sort of has to figure out what the priorities are. Any group may agree on one "cause" and disagree on many others. The problem in our society (IMO) is that we have become increasingly insular, such that as GWB would say, "If you aren't with us, you're aginst us!"

Search out some folks at the local colleges and Univs who might be interested as a project organizing disparate interests.

Icarus

 

Sorry. Once burned, twice shy. Twenty times burned, a thousand times shy. At this stage in my life, I'll join groups I agree with, but I'm done trying to start them. I'm far too cynical to expend energy on something (in this case organizing) for which I have no skill, and even a serious handicap.