Phantasmix (aka Re: money)

Photo credit: gnuf

My friend and I have bet on oil price: he says oil price will drop to $100 first, and I say we see $200 before $100.

Should I win - and of course I will - my reward will be cheesecake.

I just love being right! It seemed like a no-brainer. FLSR lost ~10% in about 3 days.

My only regret is that I shorted it too early and didn’t have cash to do it even higher.

It’s like year 2000 all over again! Have you seen p/e ratios like this recently?

FIRST SOLAR, INC.(NasdaqGS: FSLR)
Last Trade: $278.57
Market Cap: 22.20B (!)
Revenue: $600M (!)
P/E: 110.81
EPS: $2.51 (!)

FSLR fans say that it’s a revolutionary new industry, and if you were so cautious with P/E ratios you’d also miss on Google’s ride up.

The thing is, Google came up on the second Internet wave, when a lot of dot com pitfalls were clear. Solar power generation is still an uncharted territory. The risks are numerous:

• FSLR solar panels are made with the rarest stable element on earth - tellurium
• tellurium is not only rare, it’s toxic; at a later date it may be found that any environmental benefit gained doesn’t outweight its risk
• solar industry relies on government subsidies which can dry up any time; case in point - just this week, German government proposed to cut their subsidies by 30%

And seriously, who in their right mind would pay up to $300 for a stock with that kind of earnings? Any future growth potential is built-in a hundred times over. Speculator’s paradise, until it isn’t.

Would I buy the stocks in our portfolio again and why?

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This is 1/2 of my position in BRU and was a panic-induced sale. Still holding 1,000 shares.

P&L: -$510.90
P&L this year to date: $795.29

Another 2 shares, for a total of 4. Average cost $492.71 which is about 1.9 times Markel’s book value.

I have a “stink” bid in at $485 for 2 more shares of MKL and it looks like it may get filled. Strangely, it’s the one occasion when I don’t mind seeing a stock I own go down … for a short while