Grand Theft Energy: Solar City

Even during the height of the commodity/materials/mining complex rally in the winter and early-spring months, solar was one part of the market we repeatedly avoided for Members for a variety of reasons. 

Above all else, solar stocks have been notoriously and perhaps uniquely risky for years on end, what with abrupt secondary offerings, legislative risk domestically and internationally, not to mention a general pattern of earnings disasters. This morning, both SCTY and SEDG are reinforcing that thesis, both down anywhere from 18-25% as I write this. Even a name like FSLR, considered to be relatively safer, is still down a cool twenty-points (plus) since mid-March, in a fairly steep move. 

Going forward, even if the commodity and mining complex recovers for a new leg higher into summer, I remain skeptical of solars on just about any level--For the most part the reward has not come close to justifying the risks involved.

Beyond that, there are more intriguing potential value plays in commodity names which likely carry far less risk. And as we have seen with even the most esteemed hedge fund managers in recent years, more than half of the battle in this type of market climate has been avoiding the big drawdown. 

Elsewhere this morning, equites are sporting an interesting blend, with the larger cap names in the Dow and S&P leading higher, even as biotech, AAPL TSLA, and small caps all lag. 

Still, I am not too keen on shorting here, just yet, with the path of least resistance seeming higher for now--AMZN and FB continue to act like the two-headed monster hellbent on keeping the market in decent shape.