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  • lookoutgrady lookoutgrady Mar 21, 2008 9:54 AM Flag

    Accumulation vs. Distribution

    It seems this stock is still under distribution even so some funds are placing big bets with buying large quantities...

    It also seems the 28 range is a strong support, and with stabilizing markets we could see higher grounds. Of course there will be some more shoes dropping and enough opportunity to pick up shares on the cheap. Everybody is skeptical about the 'most predicted bottom' in history, but maybe that’s what it is...

    I am cautiously optimistic, and may add during drops. Looking at sectors as tech, ag, materials and some selected financials…

    Opinions please…

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    • Those folks will lose their jobs -- but they will eventually get back to work in another capacity. The companies will re-think, re-tool, and make products that are in demand elsewhere. This is the marginal adjustment that the concepts of economics are based on. Shumpeters "creative destruction". The old is torn down to make way for the new. The old CMO's and tranch garbage will make way for new better regulated products. Outdated credit verification systems will be re-worked. Good will come of all this, just as it did after the Dot Com bubble. Solid companies in solid arenas are poised to make money for those with the foresight to buy and hold them.

      and al2001x thinks he was shorting a solar bubble. he just got lucky enough to time his short with an oncoming depression, thats all that got him out of hock.

    • Here are my concerns from a macro/micro perspective in no particular order:

      1. I do not think management is "open enough" in their guidance. Case in point, why not disclose the debt offering @ the earnings call and allow the financial/investment community to ask questions.

      2. Jan Tech Road show painted a different picture from that of the earnings call.

      3. I think (needs to be verified) that about 40% of their poly supply is still based on spot market. This sourcing issue is a MAJOR problem and will take many quarters to fix.

      4. Pluto (new efficiency process technology) will accrue to gross margins around 2H'09! I hope there is a positive reaction to the stock price ahead of the positive impact to the balance sheet.

      5. CEO is a Phd. Nothing wrong with that, but probably we need to see transitional leadership from a "laboratory mindset" to a "business mindset"

      6. To your comment on the bottoming of the stock, I think this is classical multiple contractions. Unfortunately I think there is "some" more downside before we recover. It is interesting to note some recent SEC filings, a lot of their partners that owned shares have sold. Why would they do that? Is this simply naive profit taking or they know something the US-retail investor does not?

      7. Coverage of Solar stocks by the investment banks in general is average at best. This (scary) thing reminds me of the dot com days, when analysts covering the internet companies were issuing glowing reports, on the "no brainer" prospects with very little or no downside risk.

      8. Evolving Technology. This is a hot bed of research. One has to look at the biotech industry as a somewhat parallel. I would put an equivalent risk premium to this with respect to portfolio allocation etc.


    • Depends upon whether you believe that the recession we are in is going to be short lived (of the three to six months variety), or more protracted.

      Many on this board, myself included, believe that this is a much more serious recession than others in the last 20 years and that this one could be more like the one during the Nixon era.

      If so, we'll probably see some market ups and downs, but the general trend will almost certainly be down from here. If we test recent lows for a third time and they don't hold, watch out.

      As always, there are ways to make money, even during a downdraft, but buyer beware.

      • 1 Reply to ianmud
      • As everybody else I believe the housing sector is key to this. If the housing sector is indeed stabilizing and the problems are isolated or 'contained' to certain areas (California, Florida), then maybe we have a chance for a shorter lived recession. That's why the Fed took drastic measurements over the last few weeks. Much of the rest of the country actually is doing fine, e.g. the area where I'm living (mid atlantic east coast); we do have a slowdown in hiring and housing, but home prices haven't declined, and I doubt they will. Exceptions are the coastal properties, which declined about 20 - 30% (after increasing 150 % over the last 5 years), but now are stabilizing. I extensively traveled to SoCal and have many friend there. Some areas are brutal, and I believe we haven't seen much of the walkouts in those areas yet. It will hit in about 9 month as the foreclosures work through the system. However with the financial sector stabilizing, and the rate cuts working through the systems (lowering cost of lending and mortgages), and much strength in the rest of the country I start to believe that this could be digested. That’s why I am cautiously optimistic. Of course I won’t be doing anything stupid and try to let the market guide me. We’ll see where she leads us.

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