patrick.net

Buying opportunity is nice, I would rather have my money out, so I can have more fun during a buying opportunity though...

Hm I asked Zephyr for some places for more balanced information, and he gave me www.rtable.net, have you guys read this site before? It's like patrick.net, but for economics. Having all that news in one place, so easily to sort through is nice! It seems to be linking to mostly quality articles as far as I can tell.

Do either of you follow european politics?

I'm just wondering how the changes in germany might effect the euro. I'm wondering if the other side might try and sabotage the other side to gain seats at a huge expense to the euro.

Thanks for the updates guys, it's one thing to read about the market, it's another to try and figure it out yourself and have some feed back.

I had the same impression, that a few things had lined up, greece/germany/euro, bp, gs fraud news, and people were just looking for any reason to bail. I also feel that we might trade within a range this year. A couple of the rtrable.net articles said we were at around our 100 year average for stocks right now, and with this market i don't see us breaking through those averages that easily either. I believe they quoted 20:1 for the 100 year average, with us being around 20.3 or 19.6? with bubbles usually peaking around 23:1.

I don't see any reason to plummet, but I dont see any reason to make giant leaps forward either.

Kennedy,

This reminds me of the Asian contagion in 1997. A few months before that contagion I had moved to all cash because I had got laid off. Then when I got another job it was right when the contagion hit and I went all in. It was a huge windfall. I am open minded that it is the beginning of a contagion like with Austrian debt default in 1931, but that took another almost two years to unravel to our shores. For the meanwhile there's some similarities (not the same thing as "it's the same situation all over again") to overreaction to Greek sovereign debt crisis.

Well looks like we're heading up again for awhile. With 1T pumped into Europe, we shouldn't see too much instability over there.

That leaves BP, which isn't getting better, but isn't getting any worse either. http://news.bbc.co.uk/2/hi/uk_news/magazine/8664684.stm

GS could cause problems with the banking side. In hind site, I ended up selling my C at the lows! Sigh. Not a huge loss there though, and probably a reasonable selling point anyways. I sold it about an hour before the 1K dip on thursday, I didn't see any good news coming out and things were heading down. Is there something I should have considered before selling then? Or just waited things out?

I agree with you SF. From what I've been able to gather, things appear fairly evenly priced. I was hoping last thursday that we might be entering into value territory.

That being said, I was just starting to get into things, and was hoping to continue learning a bit more. Now it's basically 'on hold' it seems :(

What examples do you have of high yield bonds? What are you looking at? What do you generally look at, and what do you avoid?
I assume bonds/preferred stock are fairly similar in terms of investing purposes? Is there a clear differentiator, other than bonds have a pay out date?

Btw, I'm glad I was able to "agree" with you before you posted. And I also appreciate that my ideas aren't insane.

Whenever I go looking for more indepth information on what is happening, I just get one sided biased media looking to drum up readers and fanatics. So it's nice to see you saying you think everything is fairly valued, that it's likely to go side ways for awhile.

What I couldn't figure out what to do, is where to invest. So your comments about switching to high yield bonds makes sense. Granted I've never looked at them before, so I have no idea how to value, judge them.

Btw, I received an amazon kindle from my wife last week. I used to think "waste of money, use a laptop, or buy a book", now I think, what a fantastic device this is. The screen is simply amazing, and if you do a lot of book buying, reading, especially lugging around books... this is the device for you guys!

While I believe the economy is stable, which is itself a recovery from falling, it seems that there are many problems afoot. I don't see us tanking, but I also don't see where our investment money is going to go.

From what I'm reading now, is that the Euro has gotten a big bucket of money dumped into a leaking bucket. The leak isn't being fixed, and the fix could be painful yet unlikely to be addressed. Which isn't too surprising. Cuts will likely lead to a deeper recession in greece, which will require further cuts. Those cuts will chew into Germanys exporting business, which will hurt them. Like wise, spain/portugal will likely have similar issues, causing further damage to France/Germany and other stable EU nations.

China will be hurt by a pull back in Europe. China also has a few of it's own issues, including their own housing bubble.

Every day we dump more money into the market, which needs investing. For the most part, housing doesn't seem to be all that safe of a bet - while individuals can find good deals, buying in bulk might not yield those same consistent deals.

The stock market looks fairly valued. So where are we likely to keep dumping all our investment money? It seems that the stock market almost has to go up, with competition from investors to find places to put their money.

I'm kind of hoping for a stock pullback, to buy in. I'm sitting on cash now, and I'm not used to that :D I should learn to do it more often though! I like the idea of bonds until something haywire comes along to knock things into gear, either up, or down. I'll ride the market further up, if it starts heading in that direction, or buy in after a fall. What kind of time frames do you think we're looking at, for anything "new" to happen?

What "new" thing is building that might be a cause for concern/jubilation?

I have another question regarding bonds.

How do you purchase those, I think you mentioned you used tdameritrade, which I use as well. I tried doing some preliminary searches on google for bonds, but couldn't find anything useful. I searched for bonds on ameritrade using the names above, a few symbols from those companies, but nothing showed up. Is there an "easy" way to sort through the offerings? Are they essentially all unique, due to terms?

I'm going to keep looking, I thought they would be pretty easy to find, and found it odd that they weren't just prominently displayed somewhere!

pkennedy,

with these you want to use CUSIP # so there is no confusion. I get a report listing thousands of bonds from my firm so I never have trouble finding them.

In TDA, go to dropdown trade > Bonds & CD's and there is a variety of search method including name, CUSIP, rates, maturity etc. I think you can download it on the spreadsheet so it is easier to review.

For example,

METLIFE INC CUSIP: 59156RAT5
7.717% 02/15/2019 non-callable

Coupon & Yield
Coupon 7.717 Pay Months Feb,Aug Current Yield 6.500
Frequency Semi-Annual First Coupon 08-15-2009 Yield to Maturity 5.040
Yield to Worst N/A

Offer & Pricing Information
Quantity 150 Price 118.726 Principal $11,872.60
Min. Qty 10 Settlement Date 05-18-2010 Accrued Interest $199.36
Total Cost $12,071.96

This is a 7.717% bond so it will pay 772 in annual interest (assume 10 units) paid semi-annually. It will cost 11873 (price is 118.73% to reflect bond premium) and 199 in banked interest (buying the three months accrued from previous owner), effective yield is 6.5%. The premium is as a result of recent run-up in bond price. yield and premium has an inverse relationship. In essense, when yields go down, price go up and vice versa. Bonds are puchased in 1K increments. I bought 10 of these Tuesday for a total cost of
11,985.

go to investinginbonds.com to learn more.

Ah thanks.

I got to the CUSIP# and there was a search functionality, but I wasn't able to come up with anything! I thought it might more resemble options pricing and/or naming.

1K increments is handy, I was wondering how they were priced as well, and paying the accrued interest makes sense as well. That pretty much sums up everything I was wondering about.

I'm a messy investor. Investing without enough knowledge and dangerous :) I'm very good at savings, and I'm very value orientated, vs super deal. Super deals are generally priced that way for a reason, I like to get value and get a good price on things. I also min/max my living standards. If i'm not getting the best, I'll often buy the worst and see if I like it, if I do, I'll probably end up with the best next time. Investing, I spent too much time reading crap I didn't need to read. I should have been value investing for the last decade. Ah well, live and learn. I'm still making mistakes, but taking in everything you guys have said and others! I'm currently waiting for the market to make a move somewhere. I think it's going to head back down again, just because of momentum. I don't think any massive crash, just a drop, and then back on up. I'll see if I can figure out this dip and try and buy in as it's returning.

As for the housing deals, you're basically having this guy find a house for a 30% discount, then flipping it and paying him a 30% commission? Will he resell it, or do you need to introduce realtors in there again? Are you planning on renting them out? Even at 500K it seems like you would need some hefty rent to make it worth while.

E-Man,

In the end it is about risk vs. reward. What is the reward for the dow 15% to bring to 12.500. what is the downside, 9800 or 10%? In retrospect, I currently rather take 7% bonds. Bonds have been flying off the shelfs lately and is reflected on the yields. I may consider selling bonds and buy back stocks if Dow can break 11K and we have more encouraging economic news or bonds yields are going up.

Investment strategy is pretty flexible. I was very agressive early in my life, but I had a lot less money and no family to deal with. I have a lot more to play with now, including taking about 200K from HELOC alone. a 10% return adds up to a median salary of most people. I am working hard to add to the base yet protect it at the same time. Also, I need to protect my spouse' $$ and my kids $$. In my field, you can make money for 12 straight quarters, lose money on one quarter and nobody remebers the good work the other 12.

We cannot count on having good earned income forever. Who knows, we survived two down cycle and there's no gurantee we can survive two more or desire to survive. I was fortunate to start my career when all it takes was being able to breath, now these 23 year old coming in the door have incredible upside potential and will be harden even more over time. It'll be nice to be able to live off of working capital and not worry about working, financial independence if you will.

I was wiped out in the stock market the first time, fortunately it was just chump change then and the return on education investment is well worth it. I left hundreds of thousand in home equity in 2006, on secondary home and that is a pretty costly mistake as well. But mistakes make you wiser, ignorance doesn't.

I was thinking about buying a house in the Sacramento area, but that would make it a fourth home and decided that it was not worth it from a time perspective, not financial perspective. Those 8% yield are an awful lot of work and it is just too darned illiquid right now.

In this forum, you see a lot of anger towards banker, realtors and whatnot and you see all kinds of cynacalism toward them. To me, you want bankers to be your friend, you want realtors to be your friend, etc. It's not hard to figure out

I'm halfway between sface and you eman. I would like to be where sface is play a little more conservatively, but I'm also looking at these coming 3-4 years as possible good money makers and possible a good chance to buy and sell a couple of times.

I agree with your assessment of the ups and downs. Since we're a fairly valued market right now, the upside seems to be growth and/or momentum bubble. Downside is negative news and possible a dip in the recovery. I would like to play both sides, but playing one side safely is probably going to net me more, as I'm more likely to lose on both sides :) but as Warren Buffet said, buying a good value stock when the whole market is down is much easier than buying an excellent value stock when it's up. So waiting for a dip might be easier for me than trying to time the top.

I'm not sure about your returns though sface, I'm guessing your downside and upside are much greater. The market might go to 12500 as you said, but will it take a year? More likely it's going to jump up there with a nice run up, giving a better return within a year, at which point 15% gains will be compared with your 4% gain. I think the downside is much greater threat though. Too much bad news is likely to come out in the coming months that will push down consumer sentiment. The difference is, it will be single failure points, perhaps a couple of banks, or a construction company, it won't be 2-3 full industries blowing up at the same time, causing havok. But sentiment will be negative for awhile.

I'm wondering, if the market goes down, won't people bail on your bonds, making it harder to get out? You'll make say 4% but the under lying value will crumbling because people won't be offering as much, once the market tanks. Or is that when people start buying bonds (eg at the wrong time)?

As for real estate agents and other "frowned" upon professions, people are on one side demanding the best results, and on the other crying foul when they find out how they're getting those results. It's best to play with the winners, than with the losers though... so I'm going to stick around the bankers!

market goes down because money is flowing out, most likely into the fixed income market (bond market), lowering yield and raising the premium of the bond.

If you think about it from a broader perspective, a 30 year goverment T bill at 4.31% means you are locking in that rate of return for 30 years. If interest is at 5%, then your 4.31% is worth less thus a discount to balance the difference, but if interest is at 4%, then your 4.31% is worth more thus there is a premium to balance the difference. In the end, you'll still get 4.31% regardless and reversing the transaction is not a big deal. You can't lose money on bonds, you can make a little more than 4.31% or a little less.

I understood the difference you're paying, but the part that confused me was the fact that you're buying into the bond market paying a mini premium, thus lowing your current yields due to demand, but when you go to sell you're going to be selling at a mini discount as everyone will be heading that way too? Eg if it's a 10% bond now, you're probably netting 7% due to a slight premium you're paying now. When money flows the other way, won't you be trapped selling at a discount as well? Selling into a market that is demanding 11% now?

yes, that is the risk of the hedge. As with all hedge, there is a small cost associated with it.

Ah ok!

Still not a bad hedge, it just seems more like a loss/small win scenario? If you lose 15% in the stock market that is a big loss, if you break even in the bond market that is still a loss compared with just sitting in cash with no risk. It seems like you need to bail from bonds before they tank? Or is it common for bonds to have a major premium attached to them after a stock crash?

Bonds aren't that "easy" to get into, as I've just realized! It takes a bit of knowledge to get into them, and they're not "glamorous" like stocks. So I'm assuming they have far more savvy financial buyers using them, which seems that after a stock crash, the bonds would take a hit as those savvy people run to grab good deals in the market? Or am I way off, are there masses who will buy up your bonds, thinking the worst is going to happen in the stock market? Thus losing out twice?

I'm not betting against SF ace! Don't worry about that! I was just wondering if he was trying to catch a falling knife when people switched markets. But if people run to bonds for a double whammy, I can believe it :)

With all these ups and downs days, I'm wondering if people are having a chance to cash out, preventing a big sell off or if they're just getting antsy and likely to create a large sell off due to market psychology. I'm still looking at buying back into Citi, but they're saying Citi has a large european position which could be hurting it right now. Same with GE. Maybe they'll both be hammered down to some great buying opportunity levels...

I diversify be getting a new 401K account and having "new" options every couple of years :) Each account generally has 1-2 picks in it. Although I'm stuck without a 401K plan now, and one my last employeers closed it down forcing me to roll it into another plan which I had at the time. Not the best strategy.

Btw, have either of you gotten into options? Buying options now seems risky, but buying them after a massive market fall like in 2008 seems like a good deal? Buying value stocks with say 6 month options or a leap 1 year option? Obviously not making massive purchases, but it seems like when everything has tanked, that options would be a good bet? I've never had a chance to do option buys when the market was down (never thought about it last time it tanked.. sigh)... Since recovery usually happens decently quickly, a longer term option seems like a pretty good chance of recovering and really turning a tidy profit... I had looked at options years ago, but decided against them.

as stated before, I look for a trading range between 9800-11000 until Dec 2010 or until new development come along. No more easy buys, trading the ranges will make money for the rest of 2010.

We bounced off the 200 DMA twice recently but i suspect the real support will be around the 9800/1050 level. We'll have trouble breaking 11K as that looks like pretty strong resistence. looks like trading range until further economic news develop.

I will continue to stay away from BP, Rig in the current future.

1% chance we will see 50% haircut from here. In fact, the market have not even broken the up trend yet. Earnings growth remain intact for most companies in 2010. Sorry, that is as specific as I can get.

I need to learn this as well. I have no problems finding information, but it eventually gets so complex and so intertwined that i can't get anything out of it all. Which ends in either no action, late action or wrong action most of the time!

BP looks like it could be really screwed though. While the numbers they are reporting are miniscual compared with other oil slicks in the world, if this thing has dumped more oil than they expected and less has "surfaced" than they expected (or reported...) they could be in for a pretty serious clean up bill, and/or lawsuits from people. It's going to kill tourism, it's going to kill a lot of fishing, not only from the US, but from likely other countries as well.

Ok, so we're at about 10200 right now. Losing about 200 per day for the next two days will put us inline with 9800. The 200 DMA looks about 10200? I'm looking on yahoo finance though.

I assume you mean 9800 is likely where it would bounce off of? Will options expiration play into this, going into friday, changing momentum at all? If it hits 9800, I'm thinking of buying back in.

I was looking into Citi, and GS, but they've both got issues right now. GE also has it's own issues possible. Any other recommendations to look at? Ones that have been hit hard and are now under valued?

I hate to share specific, but I have what you are looking for. JASO

• Very little debt, Book value approaching stock value. The business is almost free. (which is justified when not earning $$$, but as can see later this is not even close to being the case.) If I own this company, I want at least 10x annual 2010 operating cash flow + net cash and assets, which would give it a market value of 2.5B - 3.0B. Very undervalued.
• Cash on hand can pay for expansion (no dilution)
• Sold out of supply for the next three quarters.
• Raised guidance 3 times in 2010 alone. 2010 estimates are way too low. I am looking at worst .90 - 1.00 a share. Scaling is improving margins/profitability. Borrowing history is over as cash flow can fully fund capital investment.
• Every government/country wants exponetially more solar capacity. Supply should not be able to keep up with demand in the future (supply is easy from 0-1GW but 1GW to 30GW is a lot harder to keep pace) and I believe solar panels will be very profitable and valuable. Solar panel reminds of the the semiconductor industry back in the 80's.
• Solar stock got punished exponentially along with oil price drop but fundamental remain the same. It will reverse the same way. I think oil price is pretty close to a bottom/supprt. Solar has always been the better/rewarding play than oil/drillers.

I am buying at these level as I am not sure what is a good entry point. Of course, do your own due diligence.

My due diligence is finding knowledge people and asking them questions :)

I do like solar as well. I'll toss some info to you, maybe you can use it. I had a roommate who had a friend involved in this business. There are a lot of SV companies currently working on solutions actually! All "different" methods, each will yield what appears to be a pretty decent increase in efficiency and/or cost. My roommate was into silicon wafer machines and machines in general, so we would hound this guy on their industries "stupidity". I learned a few things though. 50% of cost is install, that's an obvious one to reduce in the future. 50% of solar panels product cost is actually in the product "housing", apparently building the panels is expensive because they have to work under high heat conditions, and last 25 years without falling apart. The other 50% or so was apparently in the cells themselves. I always thought it was like 10/90.

Some of the upcoming solutions (which didn't seem that hard) included using light collectors and aiming more light at the cell, this makes it more efficient, while using less of the costly cells. It was funny, we said they could build mini collectors that would track the sun for next to nothing, he said it was extremely costly, and my room mate pointed out that a simple metal rode (essentially a toaster) that bent as it was heated could direct panels at the light. The mini collectors could be fairly shallow as there would be a lot of them. He disagreed, then came back next week and said a company was now doing this.. Heh. Anyways, the "technology" has a long ways to go, with *massive* potential to drop the costs. I was surprised.

He was working at a company that was working on slicing the wafers thinner, thus saving on the cell costs.

Interestingly this stock hasn't gone down much from this last fall, in fact it seems to have been climbing since oil fell through the floor, not very quickly mind you.

Actually, after reading something warren buffet wrote about car companies and horse carriage companies, I realize solar might not be a great place to be. When car companies arrived, he said it wasn't a good idea to invest in them -- most failed, of the hundreds that started up, only 3 survived in the US and they're not doing that well today. What car companies did show, is that investing in horse carriages was a bad idea.

Solar is sitting where car companies once stood -- there are so many possible break through that the first one to actually combined 3+ of these innovations together will likely be the survivor, while the rest fail due to massively being under competitive. Hmm..

Okay, onto this "banking" bill. What is likely to happen to banks with this bill? Is it going to neuter their ability to reap massive rewards at all? I've always wondered how much money a bank makes through services, and regular loans vs exotic potentially toxic stuff.

pkennedy says

Actually, after reading something warren buffet wrote about car companies and horse carriage companies, I realize solar might not be a great place to be. When car companies arrived, he said it wasn’t a good idea to invest in them — most failed, of the hundreds that started up, only 3 survived in the US and they’re not doing that well today

The same can be said pretty much regarding many new companies that start out in a given industry.
Microsoft was a small player compared to Digital Research, UNIX, or other flavors of OSware, but managed to become the most unlikely winner at the end. I certainly wouldnt touch Solar given there are a multitude of players.

E-man says

I will use a couple of methods, which includes value-investing like Warren Buffet. To put things in perspective, I talked to a very wealthy retired engineer this morning. He bought 100 shares of Exxon Mobile in the 1970’s. He now has over 2,000 shares of it. If you had invested $1,000 with Warren Buffet in 1965. It’s now worth $6.5 million.

Buy and hold on basic materials one can understand. No one has yet to invent a replacement for toilet paper and there is a long term need. I dont expect anyone of them to go out of business.

You've obviously never encountered the three sea shells...

Well Warren Buffet didn't invest in any of those companies, for the same reason. He said the gains on the winner were tremendous, but there were so many losers. MS wasn't really considered a good product, intel was never the best chip by FAR. Yet they still came out on top.

I like solar, and think it will do well. I'm just worried that it needs to have a major innovation to make it real practical, and then whoever doesn't have that innovation is going down...

"Btw, have either of you gotten into options? Buying options now seems risky, but buying them after a massive market fall like in 2008 seems like a good deal? Buying value stocks with say 6 month options or a leap 1 year option? Obviously not making massive purchases, but it seems like when everything has tanked, that options would be a good bet? I’ve never had a chance to do option buys when the market was down (never thought about it last time it tanked.. sigh)… Since recovery usually happens decently quickly, a longer term option seems like a pretty good chance of recovering and really turning a tidy profit… I had looked at options years ago, but decided against them."

Options are absolute cash cows for option originator. Imagine if they sold call option at 45 for $10 and put option at $55 for $8 dollars for three months, they win both side of the bet if price of stock stays at $50. Given that background, you can kinda tell what type of stock market movement can be expected from the days heading toward options expiration.

Options are about timing and volitilty. I guess if you know violent stock movement is headed, a 20% stock gain can result in 1000% gain in the options. Most likely, options are used as hedge and finanical vehicles like ETF with leveraged bet.

I read a couple of books on options trading, basically one shouted out about all the great gains you could make. Then I read a book about selling options and about all the money you could make :) In the end, I just tossed options out the window as advanced day gambling trading. They both had great ideas, they both shot down each others ideas and in the end it seemed like a good way to lose money.

I figured options + a massive sell-off might be an interesting time to buy in, although I'm guessing options would be priced accordingly. Even now, if we know the market is likely to trade between 9800 and 11500 like you suggested this year, it seems that options priced out over the rest of the year within this range are likely to move into the money just by using that information. I always looked at trading them during a normal bull market but the pricing seemed like it would be too well predicted. Right now, it would be pretty hard to predict, especially if it touches both sides, 9800 and 11500 once or twice during the year.

Selling options sounds interesting though. Seems like a pretty safe area to get into, assuming they are covered.

For all the options conspiracy theorists out there, check out where JPM and Wells Fargo ended up today.
JPM: 40.05
WFC: 30.11
I don't normally fall in that camp, but I'd say someone wanted them to end up at those prices. The charts are pretty impressive.

@pkennedy

FYI, bought JASO and SPWRA today, lightened up on bonds which had some amazing gains in just 2 weeks. I will likely add to stock position and sell bond position prospectivly in increments as well. I believe bonds have peaked.

@sface
Thanks for keeping me up to date.. I didn't think bonds would have swung around that much that quickly. I wish I had spent a bit more time looking into them over the last week! Although jumping in two weeks ago would have likely been with too little information on my side.

Sunpower was the company warren buffet sold out of lately wasn't it? I'm guessing that after this BP mess starts to get cleaned up, there is going to be renewed talk about "alternative energy". It might be a good buy just for that reason.

This BP mess looks like it's going to have some far reaching consequences. The fact that they're trying something new every week doesn't bode well for them. Instead of running everything they could out there, the news appears to have them shuffling one thing out at a time. Try it out, oh that failed? Well lets ship something else out. Instead of having boats just lined up and ready with new ideas to try they're going 1 after the other as if they're trying to save some money. I get the feeling the backlash on this will be horrendous because most of that oil hasn't been seen yet.

@sface
I'm just reading some of the news and worries about solar, and wanted to get your take on this.

* Energy is heading down right now, at least while the US dollar remains strong, which makes solar look extra expensive here
* The main market is Europe right now, where the Euro is down, hurting profits and causing price increases
* Germany is cutting a subsidy for solar (not sure how much or how much impact)
* Sunpower is the leader in California at least, but the above two points are pushing competitors over here.

I guess my take on this is
* Sunpower might be in the best position, as it's doing the most sales in the US and thus less likely to feel the pain of the EURO
* Sunpower is going to have more competition as competition leaves Europe and comes here
* Y/Y solar has grown in California by 135% which looks good. More competition might start a price war and/or cut into sunpowers sales but it also might further push acceptance of solar in homes and thus give the whole market a bigger boost up

Am I going to in depth with what I'm looking at? Are you considering any of these points, or just looking at the sheets and saying "looks like a bargain..." and going for it?

http://www.thestreet.com/story/10762515/1/solar-looks-to-us-to-ease-euro-woes.html

@pkennedy,

I understand the German subsidy, ASP pressure and Euro you mentioned. There are potentially lots of problems, that's why sunpower is 1B and JASO is 770'sM and not significantly more. These stock are trading at significantly below book value and combined with strong cash flow and no likelihood of dilution, and techincal signals from both the macro and company level, that is why I was a buyer.

I am not buying the entire company just 500 shares and 1000 shares respectively today so it is part of an investment strategy I have applied for the last 8 years. Over the years I have tended to simplify my buying criteria into.

1) BV and equity value
2) Operating cash flow and capital requirement
3) Gross and Net income potential
4) management and prospect for dilution.
5) technical trends

If you think about it, there is never really a screaming buy. I have learned to combined fundamentals with business environment with risk and reward to determine what I invest in. I was looking into the issue with the concern you were thinking about and came out satisfied that Gross Margins will be pretty stable and would risk some $$$ at these prices.

Makes sense. I have to get into the habit of dropping information and sticking with some good solid basics, like you're pointing out.

This is an interesting discussion, as I'm looking at installing solar panels now because my roof needs replacing. I've got a limited roof area, so Sunpower's high efficiency panels are of interest. One of "their" dealers quoted me both a Sunpower and Suntech (Chinese panels) solution. The Suntech (Chinese) system is about 17cents/watt cheaper (after all rebates are considered); it is also about 20% smaller (wattage) because of the panel's lower efficiency. The other Sunpower dealer (featured here, our margins have shrunk) had a quote that came in only ~4cents/watt more expensive than Suntech. For a sense of scale, system numbers are over $6/CEC rated watt (installed, after rebates).The installers, I think, are fairly fickle as they have to watch their own backs. I know that high density Sanyo's were the module of choice a couple of years ago; they're definitely not afraid to jump ship. At the same time, they know Sunpower is a company that will stand behind their product (and be around for a long time).

The recently passed AB 920 should create some more (mild) demand for solar systems, as utilities will now pay for excess power generated. The PUC has until Jan. 1, 2011 to set the reimbursement rate. Utilities want $.08/kWhr while solar advocates are pushing for $.14/kWhr. That said, this is nothing like the outsized feed in tariffs in Germany, and the systems are supposed to be sized for the consumer's existing use, so (in theory) any excess generated power comes from efficiency measures within a residence.

Maybe I'll buy some BP tomorrow, and then some SPWRA for good karma....

this is just the market as I see it and from my limited experience and how to play it safely. Nothing is guaranteed here. Gotta pay attention to the 1050 support level to see if we can confirm that bottom for the fourth time.

we gotta start a new stock thread, it is taking too long to load on the iphone

We need to find a new property to "discuss" this under then, since it seems so nice and quiet here for us!

EBguy, I read about Germanies buy back. That is a sweet plan. They paid something like 20 cents/watt, then dropped it each year. The key with their system is they sold EVERYTHING back to the power company, then bought back whatever they needed at the regular consumer rate of like 13 cents. So not just excess, but everything. Before investing in solar, I would invest in solar water heating, insulation, better appliances and learn more about where you're losing power and where you could get more efficiency. I like solar/wind, but I could never justify it. I've spent around $18-22/month for electricity for the last several years and this is in many different places, cities and home types. Installation is a huge part of that cost too, I'm sort of waiting for some low cost outfit to come out that will set everything up quickly and efficiently. And of course, I need to buy a place :)

I've gone through several different investment strategies, and keep coming back to the brute simplicity of earnings and dividends. Especially after reading "Margin of Safety" by Seth Klarman

Things that have never happened before are bound to occur with some regularity.

When excesses such as lax lending standards become widespread and persist for some time, people are lulled into a false sense of security, creating an even more dangerous situation.

Nowhere does it say that investors should strive to make every last dollar of potential profit; consideration of risk must never take a backseat to return.

Risk is not inherent in an investment; it is always relative to the price paid.

Do not trust financial market risk models. Reality is always too complex to be accurately modeled. [Attention Federal Reserve]

Do not accept principal risk while investing short-term cash

The latest trade of a security creates a dangerous illusion that its market price approximates its true value.

Ratings agencies are highly conflicted, unimaginative dupes.

Beware leverage in all its forms.

Financial stocks are particularly risky. Banking, in particular, is a highly leveraged, extremely competitive, and challenging business.

When a government official says a problem has been “contained,” pay no attention.

The government – the ultimate short- term-oriented player – cannot withstand much pain in the economy or the financial markets. Bailouts and rescues are likely to occur

Almost no one will accept responsibility for his or her role in precipitating a crisis: not leveraged speculators, not willfully blind leaders of financial institutions, and certainly not regulators, government officials, ratings agencies or politicians.