Trade Alert: Battlefield Environment / Mea Culpa on First Solar
Our own holdings of Intel and First Solar are joining Twitter and Facebook in getting hit this week. As you Trading With Cody subscribers know, I’ve been thinking about selling my First Solar after last quarter’s disappointing results and guidance but I’d mentioned that I wanted to see the results of another quarter in case the company could get things stabilized. Well, the company’s not stabilized revenues, much less earnings and I’m going to pull the plug on this stock.
You also know I’m increasingly cautious about the markets and have been in cash-raising mode for the last few months. The data points we’ve collected this week underscores the battlefield environment for stocks that has me feeling good about cash right now.
On the hand, you’ve got Google and Amazon blowing people’s minds with how good their quarterly reports are. On the other hand, you’ve got Twitter and Facebook blowing people’s minds with how bad their quarterly report and guidance are.
On the one hand, you’ve got GDP growth at 4.1% rate on a $19 trillion baseline number, which means there’s almost a a run rate of almost trillion dollars of new economy/wealth that could be created in the next twelve months. On the other hand, you’ve got lots of industrial companies warning about higher input costs (inflation).
On the one hand, you’ve got the Nasdaq up 13% on the year and at all-time highs. On the other hand, you’ve got the Shanghai Index (China’s stock market) down 13% on the year (a inverse mirror image of the Nasdaq) and down 40% from its all-time bubbled highs of 2015.
On the one hand, The Great Trade War of the 21st Century is escalating. On the other hand, the global economy is creating millions of new middle class consumers and workers, the Tech Revolutions like the App Revolution and the Smartphone Revolution are creating hidden productivity and consumption factors, access to capital for much of the world is increasing and so on.
Battlefield. That’s what I think of here.
I’ve owned FSLR for a few years now and we’ve got some slight gains overall on it, but this has been a drag on my portfolio long enough.
So I’m selling my First Solar. I’ll sell a little bit today and will sell the rest next week after the dust settles a little bit.
Mea culpa.
