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Why I'm skeptical of investment articles - re: Solar Energy
Posted on 8/20/15 at 11:51 am
Posted on 8/20/15 at 11:51 am
So a while back I was curious about some solar stocks to invest in. I recalled reading this article about 5 solar stocks that you should watch from CNN money.
I've noticed that solar stocks have been performing poorly (and even were at the time of the article)
Article was published May 11, 2015
Thankfully I didn't purchase any of these stocks. Here is how that would have worked out for me just 3 months later.
Maybe one day these stocks would have been a good buy, but certainly not at the time the article was written.
Terrible Financial Advice
I've noticed that solar stocks have been performing poorly (and even were at the time of the article)
Article was published May 11, 2015
Thankfully I didn't purchase any of these stocks. Here is how that would have worked out for me just 3 months later.
Maybe one day these stocks would have been a good buy, but certainly not at the time the article was written.
Terrible Financial Advice
5
Posted on 8/20/15 at 12:16 pm to Powerman
there's a lot of "pump and dump" out there in the financial media. good thing you waited.
Posted on 8/20/15 at 2:25 pm to Powerman
quote:
May 11, 2015
You cannot expect stocks to consistently rise. I'm not speaking to the merits of the stocks, but stocks in general are volatile at times.
Great companies can drop substantially in value for irrational reasons and present good buying opportunities.
In the short term, the market is a gamble. In the long term, the market is a science. You choose how to participate.
Posted on 8/20/15 at 2:36 pm to Cmlsu5618
I agree with what you're saying but none of these stocks have ever really been good long term buys
A couple were very very good short term plays but over the long haul they just don't perform
A couple were very very good short term plays but over the long haul they just don't perform
Posted on 8/20/15 at 3:51 pm to Powerman
quote:If you zoom out a bit and look at more than a 6 week window, you might see that several of those have performed quite well.
I agree with what you're saying but none of these stocks have ever really been good long term buys
A couple were very very good short term plays but over the long haul they just don't perform
Also, the solar energy market is in its infancy. How can you say that none of these are good long term buys? How can you talk about long term and only post a 6 week snapshot of a chart as evidence against?
The solar energy industry has a lot of growth ahead of it. As prices continue to drop, we will see more and more roofs covered with solar panels. Once the ROI hits 10 years without subsidies, I think we would all be silly NOT to install a few panels. Also, many developing countries are skipping the huge infrastructure investment of a grid, and communities are going straight to solar. The same goes for cars... gas is expensive, and without a reliable road network, delivery is also an issue. Without the baggage of millions of gas-powered vehicles, stations and infrastructure, it just makes sense for them to go straight to electric vehicles, as well.
Honestly, it's difficult to imagine an industry with more growth potential over the next few decades.
Posted on 8/20/15 at 8:10 pm to Korkstand
I think you make some great points about the time horizon aspect.
Question-- do you or anyone else on here have any specific insight into solar (EE, work in the industry, etc.)? I'm really curious as to what the long-term growth of solar is, because it definitely seems like it's gathered some momentum over the past few years with plummeting costs. The problem is that it's so unbelievably politically charged from both sides, that I really can't tell from googling. One thing I do know is that costs for PV cells have dropped off rapidly (although I don't have any context or ability to assess the accuracy of that).
A couple of analysts from some banks are projecting some huge gains in the next 10 years, but their models are probably horseshite and are subject to echo-chamber driven confirmation bias and an extreme amount of extrapolation that is inherent in forecasting a nascent industry. Then you have dipshits like Kurzweil and Diamandis pretending that Moore's Law would apply here, and that it'll be 100% of the grid in 20 years.
Question-- do you or anyone else on here have any specific insight into solar (EE, work in the industry, etc.)? I'm really curious as to what the long-term growth of solar is, because it definitely seems like it's gathered some momentum over the past few years with plummeting costs. The problem is that it's so unbelievably politically charged from both sides, that I really can't tell from googling. One thing I do know is that costs for PV cells have dropped off rapidly (although I don't have any context or ability to assess the accuracy of that).
A couple of analysts from some banks are projecting some huge gains in the next 10 years, but their models are probably horseshite and are subject to echo-chamber driven confirmation bias and an extreme amount of extrapolation that is inherent in forecasting a nascent industry. Then you have dipshits like Kurzweil and Diamandis pretending that Moore's Law would apply here, and that it'll be 100% of the grid in 20 years.
Posted on 8/20/15 at 10:01 pm to Powerman
I tell clients all the time that by the time a stock is discussed in one of the money magazines or free websites, all the gain has been made.
That may not be true 100 percent of the time, but it's true enough that you should stay away from it, unless you have done independent research and believe it may still have more room to grow.
This is also why I tell people unless you have the time to track and research, stay away from individual stocks, and just pick a good index fund.
That may not be true 100 percent of the time, but it's true enough that you should stay away from it, unless you have done independent research and believe it may still have more room to grow.
This is also why I tell people unless you have the time to track and research, stay away from individual stocks, and just pick a good index fund.
Posted on 8/20/15 at 10:10 pm to Korkstand
Agree with your whole post but do wonder about this sentence:
Unless you currently live where they don't have subsidies, I think people are silly to not do them now. And if LA is where you live, they were as high as 80% of the purchase. I couldn't believe people didn't jump on it then. Now it has gotten really bad from what some friends/family have told me and the state could be a couple years out before you see your rebate.
quote:
Once the ROI hits 10 years without subsidies, I think we would all be silly NOT to install a few panels.
Unless you currently live where they don't have subsidies, I think people are silly to not do them now. And if LA is where you live, they were as high as 80% of the purchase. I couldn't believe people didn't jump on it then. Now it has gotten really bad from what some friends/family have told me and the state could be a couple years out before you see your rebate.
Posted on 8/20/15 at 10:17 pm to Lou Pai
quote:
I'm really curious as to what the long-term growth of solar is, because it definitely seems like it's gathered some momentum over the past few years with plummeting costs.
The growth has been phenomenal. In some places, like Hawaii, it has been astronomical. Unless the ITC gets extended past Dec 31, 2016 there will be a bit of a valley in 2017. But from everything I have seen the solar industry will be back on target by 2018. Prices continue to come down because manufacturers know the ITC is going away and their trying to get the break even close to what it is with subsidies. Battery tech has come a long way and now it is full blown ready to go in the market. There were multiple displays debuted at a builders convention here this past weekend. Prices on those are high but expect those to come down at a steady pace. And when subsidies and NEM (net metering) goes away, batteries will be on par with them and then the utilities will be hit by a pretty good loss of customers in some places. Nothing to make them close shop or anything
but Oahu is already at 12% saturation of PV. It would be more but the utility has slowed it down for the last year and a half with bullshite. When battery prices come down, I hope to see the utility dealt a death blow. quote:
A couple of analysts from some banks are projecting some huge gains in the next 10 years,
Everything I have seen from inside the industry says this is true.
Posted on 8/20/15 at 10:32 pm to Korkstand
quote:
Also, the solar energy market is in its infancy
PV has been around for a long time, well back into the 1960s. There has been little advances despite millions of millions of $$$ of subsidies.
The efficiency of a solar panel in the 1970s was around 10-12% Today, the efficiency of a solar panel is around 12-14%. Not much of an improvement.
The reason there has been price declines is because manufacture of solar panels has shifted to China were labor cost are extremely low, capital requirements are minimum, and environmental protection standards are almost non-existent.
quote:
The solar energy industry has a lot of growth ahead of it
Possibly but Europe is learning some painful, costly lessons about 'green' energy.
The Spaniards gambled heavily on PV & are losing big time.
quote:
Honestly, it's difficult to imagine an industry with more growth potential over the next few decades.
People jumped on the 'green' energy bandwagon and are quickly jumping off now.
There are going to have to some huge quantum leaps in PV technolgy. There are some advances being made but they are in inverter technology and a couple of other areas.
PV investments are going to be a huge loser for a long time to come.
Posted on 8/20/15 at 10:56 pm to Reubaltaich
What are the constraints regarding raw material costs? My understanding is that the cells are made of silica which is basically limitless in abundance, correct? Anything else that could cause any bottlenecks? Also, how much lower could costs conceivably come down, absent a major breakthrough in battery technology?
Also, does anyone seeing this being able to displace natural gas in the next couple of decades for power generation?
Also, does anyone seeing this being able to displace natural gas in the next couple of decades for power generation?
This post was edited on 8/20/15 at 10:58 pm
Posted on 8/20/15 at 11:28 pm to Reubaltaich
quote:
PV has been around for a long time, well back into the 1960s. There has been little advances despite millions of millions of $$$ of subsidies.
WHAT?! quote:Are you serious, bro? Are you really comparing the best lab results of the 70s to the commercially viable panels of today? Either compare the lab results (10% in the 70s vs 40%+ today), or compare the commercially viable products (pretty much nothing in the 70s vs 15%+ efficient panels today). Or how about talk about the 10ish% efficient installed panels of 15 years ago vs the 15-20% efficient panels today? Is a 50% improvement in 15 years "not much"? Don't throw lies out there to fit your agenda. It's pretty sad.
The efficiency of a solar panel in the 1970s was around 10-12% Today, the efficiency of a solar panel is around 12-14%. Not much of an improvement.
quote:While that's part of it, the fact remains that costs are dropping no matter where they are made.
The reason there has been price declines is because manufacture of solar panels has shifted to China were labor cost are extremely low, capital requirements are minimum, and environmental protection standards are almost non-existent.
quote:The Poliboard is that way <----
Possibly but Europe is learning some painful, costly lessons about 'green' energy.
The Spaniards gambled heavily on PV & are losing big time.
quote:Link?
People jumped on the 'green' energy bandwagon and are quickly jumping off now.
quote:No, we just need the steady improvements that we've seen for decades to continue.
There are going to have to some huge quantum leaps in PV technolgy.
quote:
PV investments are going to be a huge loser for a long time to come.
Alright man. Posted on 8/21/15 at 12:03 am to Lou Pai
quote:
What are the constraints regarding raw material costs? My understanding is that the cells are made of silica which is basically limitless in abundance, correct?
True on that. Most solar panels are made of monocrystalline silicon(mono Si). These are roughly 6 foot cylinders that are 'grown' in labs that have to be super clean. You can probably pull up the manufacturing process on youtube, pretty interesting stuff.
Its not so much the material cost as is the manufacture of the Mono Si. And then there is the labor cost. Compare paying a Chinese worker a few dollars a day with little or no benefits to that of an American worker...you know the story.
Battery technology has advanced over the last few years but it still has a long way to go for it to be viable for long term storage with a density that is needed to power many of the electricity hungry devices in our homes, businesses, and factories.
quote:
Also, does anyone seeing this being able to displace natural gas in the next couple of decades for power generation?
Possible. Personally, other than natural gas, I believe the future of our power needs will be met with nuclear power.
Posted on 8/21/15 at 12:08 am to Korkstand
quote:
Are you serious, bro? Are you really comparing the best lab results of the 70s to the commercially viable panels of today? Either compare the lab results (10% in the 70s vs 40%+ today), or compare the commercially viable products (pretty much nothing in the 70s vs 15%+ efficient panels today). Or how about talk about the 10ish% efficient installed panels of 15 years ago vs the 15-20% efficient panels today? Is a 50% improvement in 15 years "not much"? Don't throw lies out there to fit your agenda. It's pretty sad.
LOL. I knew someone was going to jump at the 'new & improved, increased' efficiency rating of solar panels.
I am not buying the claimed 40% efficiency ratings of solar panels. Lets see some independent, observable studies and then and only then can we believe these new claims.
wish I could answer some of your other points but its late and its Friday eve. I am outta here.
Posted on 8/21/15 at 12:30 am to Reubaltaich
quote:
LOL. I knew someone was going to jump at the 'new & improved, increased' efficiency rating of solar panels.
I am not buying the claimed 40% efficiency ratings of solar panels. Lets see some independent, observable studies and then and only then can we believe these new claims.
Why are you talking about efficiency anyway? The main difference that makes is how much area is required for a given output. A more important metric is watts per dollar, which has seen drastic improvement over the years.
Hey, how much improvement in efficiency have ICEs seen over the past century? (Hint: not much). How has that impacted their commercial success? I bet a lot of dumb investors thought they were going to be huge losers 100 years ago, too.
quote:That's too bad. I could have used a couple more laughs before bed.
wish I could answer some of your other points but its late and its Friday eve. I am outta here.
This post was edited on 8/21/15 at 12:34 am
Posted on 8/21/15 at 1:46 am to Reubaltaich
quote:
The efficiency of a solar panel in the 1970s was around 10-12% Today, the efficiency of a solar panel is around 12-14%. Not much of an improvement.
You don't know what you're talking about. Are you stuck in 1970?
quote:
The reason there has been price declines is because manufacture of solar panels has shifted to China were labor cost are extremely low, capital requirements are minimum, and environmental protection standards are almost non-existent.
So what about all the panels being made in Japan, Germany, USA, Korea...??
quote:
People jumped on the 'green' energy bandwagon and are quickly jumping off now.
Wow, I had no idea!
quote:
PV investments are going to be a huge loser for a long time to come.
ETA: I see kork already got it, but that post was to much
This post was edited on 8/21/15 at 1:54 am
Posted on 8/21/15 at 1:52 am to Reubaltaich
quote:
wish I could answer some of your other points but its late and its Friday eve. I am outta here.
It's definitely better to roll out, you are nearly clueless. I said nearly, so don't jump down my throat
Posted on 8/21/15 at 8:39 am to Powerman
The bet on this has little to do with the solar energy stocks themselves but the government regulations/incentives. If the government stops the renewable energy incentives on Dec 31st 2016 (as is currently the plan), the stocks are sure losers.
If you think the government will extend those incentives, now is a great time to buy because they should rally when the incentives are extended.
If you think the government will extend those incentives, now is a great time to buy because they should rally when the incentives are extended.
Posted on 8/21/15 at 8:44 am to Korkstand
quote:
Also, the solar energy market is in its infancy.
But it's also a market that is growing at a rapid rate
quote:
How can you say that none of these are good long term buys?
Show me which one looks like a good buy over any 5 year period
quote:
The solar energy industry has a lot of growth ahead of it.
Of course. But it's already been growing rapidly.
quote:
Honestly, it's difficult to imagine an industry with more growth potential over the next few decades.
Agreed. Hence why I was initially interested in the industry as an investment. It appears that this author was off the mark though. I'd be taking a beating right now on any of those. Will they be a good buy soon? Perhaps.
Posted on 8/21/15 at 11:13 am to Powerman
quote:Yeah, young markets do that
But it's also a market that is growing at a rapid rate
quote:In the past or in the future?
Show me which one looks like a good buy over any 5 year period
quote:You are looking at a young, volatile industry that is heavily dependent on China over probably the worst 3 month period for the whole market that we've seen in years. I'm not sure what you expect.
Agreed. Hence why I was initially interested in the industry as an investment. It appears that this author was off the mark though. I'd be taking a beating right now on any of those. Will they be a good buy soon? Perhaps.
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