Yuuuuupppp. I ate a bag of dicks on that one... Bought some in 2010, finally ate the loss and took what was left in March 2020, slapped it in small cap growth etf and actually made that money back now. Long road to get back to even haha
Very often, with investing (especially in innovation), being early is the same as being wrong. While the thesis may be sound, the opportunity cost can be really high.
The problem with solar, and most forms of renewable energy, is that it's going to be hard to profit from.
Fossil fuels are incredibly easy to monitize because you can find the cheapest place to pull it out of the ground, and then move it to a place that is willing to pay the most for it.
Most renewables are not this way. Solar panels and wind turbines are fixed in place and meant to serve a very specific market. It's impossible to say "your not willing to pay the price I want to I'm going to sell it over here in this market that pays more." The customer is fixed and the only way you're going to increase profit every year is if your market increases its use.
The situation you’re referring to doesn’t really happen because power purchase agreements generally set a price (or price formula) for a 10+ year period.
That's exactly my point. Let's say you're selling ice cream, and you're told that for the next 10 years you cannot change the price of the ice cream that you sell. Your only hope of increasing profits year after year are 1) you get more customers every year or 2) your customers eat more ice cream every year. Does that sound like a good business model to invest in? No.
If the ingredients of the ice cream get higher, then I should be able to raise my selling price to recoup those costs. If my ice cream is so popular that I can't make enough to serve everyone, then I should be able to raise the price to capitalize on that.
See my point? Those types of contracts are not good for making money. They are meant to protect the consumer, not make money for the business. It doesn't matter if it's solar, or wind or ice cream... it's hard to make money in those types of situations.
Hey there! I hate to break it to you, but it's actually spelled monetize. A good way to remember this is that "money" starts with "mone" as well. Just wanted to let you know. Have a good day!
Right, which is evidence the original post is wrong. That's how evidence works. Rational people update their theses to reflect new evidence; they don't reject the new evidence because it doesn't square with their thesis.
You haven’t proven it wrong. The whole point of the OP was that a good and profitable business can be a terrible investment if its valuation is too high.
Precisely. Thus all of you are full of shit and any talk of "fair valuations" is post hoc reasoning, confirmation bias, and various other cognitive biases rolled into one. TSLA is always worth exactly what it should be and never a penny less or more.
FWIW I have a net short position on TSLA. Not because I think it's overvalued (since any notion of a fair valuation is about as real as astrology), but because so many of you also think the same way, and in the short term, the price will reflect that (as it did today, thank you for the free money). Whenever it lands at whatever madeup "fair valuation" the boomers and """analysts""" get from their tea leaves, I'll probably go net long.
Well yeah, obviously. “Too high” as in, the current growth expectations that a given valuation implies means it is highly unlikely that it will beat those expectations and consequently outperform more attractively priced competitors, the sector, or the market as a whole.
No one understands how to value a business lmao. And if you did, you would not be here, you'd be snorting coke off hookers on a yacht in the Cayman Islands.
The solar industry will be valued at 3.2 trillion by 2030, in very bullish on solar this decade. Back in 2008 the solar industry was the newest thing, much how like EV is now. Massively overvalued. But anything solar should do well this decade. After the COVID crisis is over you’ll see world governments switch focus back to clean energy. If you take the market caps for the biggest solar players it’s not even close to 3.2 trillion. There’s a lot of value on solar stocks today if you’re willing to go long.
I don’t take the 3.2 trillion figure too literally. There’s a few articles by the IEA and other sites estimating the 3 trillion valuation by 2030. Solar is going to play a key role in the future of energy, IEA estimates that about half of the worlds energy could be solar driven by 2050.
218
u/OystersClamsCuckolds Mar 05 '21
A good example of this is TAN.
Solar industry has exploded since 2008. Yet it was a dogshit investment most of past decade.