Thursday, September 29, 2016

Forbes article heralds the bottom for solar stocks. [FSLR]

I'm on record as having put in a call for a likely bottom for Sunpower in this post.  My alternate model allows for one more small wave down but the primary model says the bottom is already in.  Now that I've made that call based on chart data alone I am going back and looking at recent articles on the sector.

This Aug 12 2016 article by a Forbes contributor states, "...what’s left of the solar universe is showing severe signs of stress, and given the tricky accounting and the prevalence of China-based companies among the panelmakers, that stress may very well be understated. So, if you...don’t want to lose money, don’t invest in what’s left of the solar stock universe.".

OK well there you have it.  Another high powered pundit spouting off from his main stream media podium predicting endless pain for the entire solar panel industry.   He has declared the entire sector uninvestable simply because he makes the all too human mistake of thinking that true value will at some point become free and also in believing that current trends will continue unabated in perpetuity.  After all, it has been such a crappy past few years for solar, let's all just throw in the towel, right?

Well yes, that is exactly what people who do not know about Elliott waves do all the time.  It is the norm rather than the outlier case.  We as a species do that because we travel in herds.  Well, most of us do.  I make it my business not to.  That is why I was laughing at the moron who called gold a pet rock right near the bottom and I declared at the time that he was going to be sorry he posted that because such a wildly emotional belief by the herd is the hallmark of tops and bottoms.

I know people are forgetful and in fact the market counts on it.  That's because the history of a stock oftentimes predicts its future.  Yeah, I know it sounds like a cute catch phrase but then if there is no actionable truth to it, how the the Hell did I nail the bottom on DRD in this post so well?  Here is the model chart from that Nov 22, 2015 post:

In fact I wrote, "Because of the foolish notion that gold is a pet rock, they hated DRD at $1.10 and they aren't showing much love at $1.56 (today's price) either.  I want to be on record as saying that they are going to love it at $8 (minimum price target) within 24 months.".

So let me recap what I did there folks just in case you haven't grasped the enormity of it.  And I don't do this to brag!  After all, I did not invent Elliott waves.  I simply became an expert at using the tool given to us by Ralph N. Elliott back in the early 1930s.  But if you think about how remote the odds must have seemed to everyone reading my post back then and then you compare to what actually happened, you have to conclude that this "Captain" fellow is on to something real and something big.  After all, the stock had just bottomed at $1.10.  It looked to everyone EXCEPT ME that it was just going to evaporate.  Nobody in their right mind except an Elliottician would conclude that this pissant stock would become an 8 bagger off the bottom.  But as you can see from the chart below, that is exactly what happened.  It peaked at $9 and change.  As it was peaking I was warning my paid blog to step away because the 2nd wave would cut deeply given the rapid move up.

Furthermore, if you review the DRD post link carefully you will see that at the time of that red arrow in the chart above, I offered the short term outlook shown in the chart below.  The primary (red) model expected a move back down to $1.20 before launch.  Blue is the alternate model given that all things in this universe are based on odds and not absolutes.  As you can see from above, the red model was followed almost exactly as the shares fell from $1.84 down to $1.34 before reversing up wildly.

I don't care what high powered Wall St. outfit says that solar is dead. That is like saying clean energy is dead.  I bet that the doofus who wrote that article doesn't even have any solar.  But I do!  As reported in these pages several times, I have 15.3 kW on my roof, all working perfectly for a couple years now with zero noise and zero maintenance.  Here is the view from Google Earth:

Below is my dashboard.  Today was a nicely sunny day and I generated 75.1 kWh with a peak production of 12 kW.  Note: while the system is rated at 15.3kW you will never get more than 85-90% of the rated DC output of the panels on the AC side which is what is being measured here.  That's because inverters are not 100% efficient, angle to the sun is not ideal, etc.  Also, the panels degrade ~10% in the first year but then hold their output for 25 years.  So, abarring accidents, 12-13 peak kW is about what this "15.3 kW" system will output for the rest of my life.

 The bottom line is that I know the true benefits of grid tie solar and if you plan to stay in your home for a long time it is well worth the investment (providing you are not gullible when dealing with the installer of course.  Otherwise it can be very costly).
So did the solar industry get ahead of itself?  Well sure it did.  Of course it did.  Government got involved and distorted the short term economics of it.  This is why there is so much volatility AND NO OTHER REASON.  Everything in the economy that the government touches be it solar or health care will see ripples as a rock entering an otherwise serene pond.  The rock does nothing but cause waves and disrupt everything around it.  But the government arm gets tired of throwing rocks and the pond settles out eventually.  Solar is about to settle out simply because government assholes have given up trying to be do gooders (for which service using our money they can extract a fat living for doing nothing beneficial).  But the Elliott wave count was not and is not fooled by this.

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