Thursday, May 29, 2008

Lehman Recommends Pair Trades in Solar Stocks

Our second link today from Barron's Tech Trader Daily (I try to avoid dipping into the same stream* but in this case Tiernan Ray is the guy on top of the action):

In contrast to Merrill Lynch’s negative note on solar stocks today, Lehman Brothers analyst Vishal Shah says in his own note today that Germany’s tax burden as a result of subsidies for renewable energy is “not significant,”perhaps a fifth of a Euro per killowat hour per month on every bill, and of Germany’s total renewable energy burden, less than 20% is due to subsidies for solar, in particular. Moreover, Shah goes through a math to explain that if all existing supply of solar panels was sold into all subsidy markets in Europe, the total burden would come to about 7 to 9 billion Euros in 2010, up from per haps 2.8 billion Euros this year. That’s not that much, he concludes, given rising fuel costs. As for politics in Germany, Shah thinks “the probability of a proposal being passed [regarding subsidy reductions] is very low […] as none of the two largest alliances have dominant power in the Parliament.” And things could well drag on into September, he argues.

But how to trade all this is more complex....MORE

*You could not step twice into the same river; for other waters are ever flowing on to you.
-Heraclitus, Fragment 41; Quoted by Plato in Cratylus;


...No man ever steps in the same river twice, for it's not the same river and he's not the same man....

From Wikiquote