Two ways you can look at this - bulls can say the rally is widening out in a very broad way and speculative juices are back, bears can say when speculative merchandise starts to run like this we are getting very long in the tooth and approaching the last few innings of the rally. I am ambivalent but for your viewing pleasure....
(I believe David Einhorn of Greenlight Capital [hedge fund] owns JA Solar (JASO) so congrats) :)
NEW YORK (Dow Jones)--Shares of solar companies soared Thursday following a media report that the Chinese government is open to supporting the local development of solar energy in China. Asian technology newspaper DigiTimes said in an article Thursday that China hasn't yet designed a program or set a schedule for solar energy subsidies as costs of solar power generation are still too high. DigiTimes attributed the comments made at a Taiwan-China photovoltaic industry convention to officials from the Chinese Department of Renewable Energy. "This is consistent with what we have always heard and thought," Cowen & Co. analyst Robert Stone told Dow Jones Newswires, adding the news is still positive and is boosting shares. "The Chinese market could potentially be very large because China uses a lot of energy and demand grows with the economy." Gabelli & Co. analyst John Segrich said that while China has discussed renewable energy in the past, it usually focused on wind power. He added that the fact China is talking about solar power at all is a positive factor for the industry. "China has the potential to be a significant market," Segrich said. "It has gotten everyone excited." China-based solar companies traded up the most Thursday, as Cowen's Stone said China-based companies stand to benefit most from any Chinese subsidies. . "Chinese companies are also trading higher than other companies because up to now, they were trading at a discount to U.S. and international names," Stone said. "The valuation gap is closing somewhat today." Stone added that if the Chinese government began providing subsidies for photovoltaic products, it would benefit the solar market overall, though Chinese companies would be the biggest beneficiaries.
10 comments:
Can we just buy TNA and hold for 5 years? Should be higher right?
einhorn is loaded on WFR too & he just added it back in Dec... thing has been ripping lately.
woooohooo solar, wooohooo china
Anon,
all 2x, 3x ETFs will eventually be $5 or less
just by construction
you cant hold TNA for more than 2-3 days hah
So what about just waiting for TNA, SRS, and SKF to pop once this rally fizzles out and then when they double - short them and hold the short for 5 years?
ADifferentAnon
look at RYTNX long term, from 2003 to 2008, that was not too bad...
http://finance.yahoo.com/q/bc?s=RYTNX&t=my&l=on&z=m&q=l&c=
Anon 2, that is a very easy theory to say but as you can see those can move 100% the opposite direction and you can lose all your money. The danger in shorting is losses are unlimited.
TNA is opposite of SRS/SKF... if you want to short things after a rally fizzles you'd short TNA with URE and UYG, being short SRS is actually a bullish bet.
We're dealing with a different beast these days. Before 2008 we were in a time period of unprecedented directional stability. 2x/3x etfs do very poorly when thrown up and down repeatedly in short time periods. If we have rally and crash every 3 weeks these things get torn apart. The thing is if you are going to short them you'd have to blind yourself from the account so you don't get a daily heart attack.
ADifferentAnon
Mark, didn't see your comment in time... I guess I'd short TNA as well then. Not with the intent of making money on market direction but banking on continued volatility in both bullish & bearish directions and the "degradation" of the ultras.
But your right, timing has to be right, for instance, once REITs really crash, SRS may double or triple - the question is if SRS is 30 by then, then if you shorted from 110 you'd still be safe, and you can be guarenteed that it will fall just like it fell from 250 to 48. But in truth, I wouldn't have the guts to hold on - i don't have the emotional fortitude
Anon 2
Hey guys, sign up with a name haha.
I can't keep Anons straight
I have a post on the degradation - they are like buying options with near term expirations in terms of time decay. All of them.
Search the archive on SKF - I think I wrote it in January or so.
I went negative on China, Emerging Mkts, Commercial Real Estate, and Financials in fall 2007. I bought all those stupid ETFs as long term hedges. The underlying indexes in all but financial fell 50% in just over a year, but I lost money on all 3 ULTRASHORT ETFs thats how bad it was.
I only made a piddling amount in SKF ... even with Financial index imploding in 1930s style
They are terrible long term hedges (at the time I could not short individual names like I was calling out - WaMu, Freddie - etc - heading to zero) so all I had was SKF.
One bad reversal day in a 2x ETF and your gains for a month are gone.
Mark,
Let's party in solar like it's DEC 07 ;)
check the TSL board....some folks may be excited ;)
bill
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