Supervisory Substance (phatpharmer) wrote,
Supervisory Substance

Updated on My Investing

After a long hiatus from investing, when I realized that I was not so much "using stocks as a savings mechanism" as "spending my erstwhile savings on stocks", I am now in a position to make a couple more buys over the next month or so.  My portfolio is up, but certainly not creaming the market or anything like that.

I am staying loosely in the alternative energy sector.  It is challenging to invest in right now because I think that it is a sector with strong long and even medium term growth potential, but I also think that technically the assets of most companies in that space are incredibly overvalued. 

I will likely buy AMAT and RZ.  I am waiting in the wings for one of them to have a few bad days so I can buy a little bit lower, but that might be asking too much.  Both companies have both (a) energy-producing products and (b) energy-efficiency products.  This is important to me because I believe that there are plenty sets of economic circumstance where demand for (a) or (b) might be extremely weak, but few sets of circumstances where both would be weak.  In a nutshell, an economic recovery would stoke demand for energy-production technologies and high fossil fuel prices would stoke demand for energy efficiency. 

For people who have not been keeping track of what is going on in solar power recently, the dynamics have completely changed in every way imaginable from say a year or two ago, even though the flavour of hype and doubt about the industry has not changed in tone.  And by hype I mean claims like "X new solar technology now makes energy cheaper than coal!" and by doubt I mean claims like "Solar energy is incredibly expensive and will never be able to compete without subsidies".  When you consider the fact that coal is (generalization alert) now selling for something like a third of the price of what it was about 9 months ago, you realize that subsidies and even "solar technology" are not the prevailing forces.  You have a durable high-tech piece of equipment competing against a mass-consumable commodity, and the market is going to make this decision.  You have a massive business paradigm shift taking place.  But what you do have unfortunately is a solution looking for a problem.  This isn't like the introduction of plumbing or electricity or railroads or cars or airplanes or cell phones or PCs where you have a new product coming in to meet a new human "need" which isn't currently being met.  People are getting around town and charging their iwhutevurs just fine burning gasoline and coal, and they will keep doing those things just fine when coal and gasoline start running out because there are replacement technologies.  Car companies know how to make electric cars and there are at least a half dozen good ways to make electricity without fossil fuels.  And obviously all this stuff is the good news AND the bad news.  It would be great if solar electricity were somehow more FUN to use, but it's not.  It's just electricity.  So as hard as the green PR people try to make it sexy, it's not, honestly.  It's not fuckin' kombucha.  It's not an iwhutevur.  It's a utility bill.  It's a pain in your fucking ass, is what it is.  And it's going to have to compete down and dirty with coal, and in Kentucky they literally have mountains made out of that stuff.  And if you want to buy stock, that's a really good thing, because the solar industry is in it's pre-pubescence right now.  It's ackward as hell, it's not really as cute as it used to be, and it doesn't even have hair on it's nuts.

Buy.  And don't forget, India and China are still the shit.

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