I googled "hobo solar" and found somebody named "investinghobo" who wrote nice informative articles and posts. I was surprised that being so literate he made a principal mistake underestimated capacity of manufactures
There are flaws in those who post and write strictly based on what companies say and do not look outside those lines. Hobo had an excellent understanding of the costs associated with making solar products long before most around the boards had. He shared with others that knowledge which helped educate others to be smarter and wiser investors including myself. That is very admirable. However a propensity to only give direct number calculations based on company guidance and not look between the lines or outside of the company is a flaw. As is espousing vague generalities regarding changes in market conditions and who will or will not be impacted.
There are several posters who recognized the oversupply and the resulting impacts on earnings for solar companies well before the collapse happened. I remember Boss getting out in early 2011 when there was a wiff of oversupply at the end of Q1 2011. I was posting that LDK was going to post heavy losses when others were claiming hefty profits. I also suggested that if the ASP trends continued as the market was suggesting and poly declines were headed to where they did, no solar would be profitable by the end of 2011 not TSL or JKS. I looked at guidance of several companies for growth and compared to anlaysts market growth. I suggested that growth was not aligned with the market segment and there was a risk of missing guidance. There was a report of a 6-10GW of excess inventory in the channels in early 2011, that if one looked at it told you that markets would have to exceed 25% of forcasted growth in order to drain off that inventory over the next 3 quarters. Market was telling you 25% yoy growth, yet companies were quoting 40-50% growth rates or more and chanel supply had 25%-30% already in the pipelines and capacity analysis was telling you there was 2 to 3 fold to much Poly and 100% to much wafer and module.
There were people who foresaw the collapse and and recognized it could last quite some time and as the numbers started coming in, recognized how low things might go, maybe not in early 2011 for how low things would fall, but clearly after numbers were substantiated by late 2011, some recognized the lower points.
Odyd had compiled on his own website back then an excellent database reference of capacities and forecasted capacity. That was one of 3 best thing around in late 2010 early 2011 for reference and for that I have always commended him and respected him for his data compilation. PVInsights had just started and was giving realtime ASP trends that previously was only for those who paid research firms, and some people were posting hard cost analysis data points from research firms and brokers. These all suggested hard data and trends Odyd data that suggested massive overcapacity. I used this data and tried to point out to people the massive poly over supply being built out vs demand.
There were people who foresaw the collapse and and recognized it could last quite some time and as the numbers started coming in, recognized how low things might go, maybe not in early 2011 for how low things would fall, but clearly after numbers were substantiated by late 2011, some recognized the lower points.
I remember Boss suggesting ASP was to drop to $0.55-$0.60, very early on, well that low end range was hit.
People many times look for hope and do not take emotion out of investing. If you invest in hope and wants you are bound to look at only one side of the equation. That is why there are computer trading programs. These take the emotions out and looks just at the facts.
I do not know how old some of the posters are or if they are real investors, but if you have been around developing new industries, most all go through growth cycles that solar has gone through even with rising demand as solar has had through all of this. When this happens companies do not play nice as survival instincts and competition kicks in and as some found out, companies will slit each others throats.
Always look at what is stated, not just what the costs are ad many times, these 2 do not match. If they do not match use your own brain to decide what you believe is right. If a company states they will spend $200-$300 Million on capex, but then gives you capacity expansion growth rates that suggest 2 to 3 times that is needed, let your own logic conclude what will likely happen and factor in the costs if that part comes to fruition.
Project out and do a upside downside risk assessment and make your own decisions as to what sounds logical and probable.
I post a lot of counterpoints that are downside risk assessments. I do this not to bash or trash but to make certain among all the hoopla that one considers the downside risks and where the data points might come from. No sense in posting the pump along with all the others, but I will acknowledge the upside when it looks valid from the data.
Among all the trash on Yahoo, there were nuggets of very good information, Odyd and this website was 1 of those gems that actually supplied very useful data for those that wanted to look for it.
For that I commend Odyd.
But that is the past, the forward is now, mot of the target pricings have been reached, the carnage is being dwindled, the downside risk for input costs has nearly bottomed and with it, the ASP has finally started to stabilize. While the price can go up and will be a benefit towards profitability over the next 3 to 9 months, the general trend over the next 2 to 3 years is likely another 20-25% drop in ASP. Do not forget to factor in various cost analysis both up and downside as after every bust is generally better fundamentals. The question would then be asked, how much better and what is the downside risk.
Trading Solars »
Got some CSIQ (Apr 30th 2013, 9:13am)
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