Houston, we have a problem. Ice sheets in Antarctica the size of Manhattan are breaking off and falling into the ocean at an alarming rate. Global warming is real, people!
Now, we can curl up in a ball and continue to ignore these issues or we can face them head-on. I suspect being the human ingénues that we are, we will choose to face this issue head-on.
And when we do? Watch out.
For investors, identifying these massive shifts in behavior is the secret behind the success of Tobin Smith‘s ChangeWave Investing. Quite simply there is no better resource for investors looking for companies that will profit from Titanic change.
Obviously the energy sector should be front and center for believers of ChangeWave Investing. Fossil fuels, by choice or force, will be eventually replaced by other technologies.
Given that the global economy depends on fossil fuels, anything that replaces oil will be quite huge. It is really cut and dry.
That’s why the solar sector has drawn so much interest. Hey, the sun will be here for billions of years. No worry about supply and no worry about waste. The sun burns clean and the conversion to energy leaves no smokey mess.
So why in the world are solar stocks getting pummeled in the market?
Good question. The simple answer would be that many of the companies that participate in the space enjoyed huge rallies in 2007. LDK Solar Co. Ltd. ( LDK) more than tripled in value during the year.
No wonder then why these alternative energy stocks are down nearly 50% as a group in 2008.
Does that carnage represent a bargain?
In the long term the answer has to be a resounding yes. Change does not occur overnight. Investing in these stocks requires patience.
According to Toby, the issue with LDK is a mere solar flare. The combination of a weakening economy, horrible investor sentiment and profit-taking have resulted a sharp correction.
There have also been negative rumblings about solar in general. Worries about U.S. tax credits, accounting, environmental practices and supply/demand issues with respect to polysilicon have also pressured share prices.
Not to worry says Toby. LDK‘s management has addressed many of these issues. More importantly the company provided updates with respect to production contracts that indicate 100% of 2008 and 90% of 2009 capacity will be utilized.
Such visibility should help reduce the volatility in these alternative energy stocks. LDK is now trading near its initial offering price and at the lower end of its trading range. In my Rational world, buying future growth at a discount makes all the sense in the world.
If you are looking to speculate on these Apollo stocks, now may be the perfect time. Change, she is a coming, and you should be along for the ride.
It’s time for investors to start getting back in the game and nibble at the stocks that will be the biggest secular growers in the next six to 12 months, and beyond. To learn about all of the great alternative energy stocks ChangeWave Investing subscribers are riding, and to get your 90-day, risk-free trial to ChangeWave Investing, click here.
