How to Make Money in Any Market Environment
Thursday, May 22nd, 2008
By Mitchell Clark, B.Comm. for Profit Confidential
Do you remember this company, First Solar, Inc. (NASDAQ/FSLR)? This burgeoning Arizona power module manufacturer for the solar energy industry was just trading around $50.00 per share one year ago. Now the stock is over $300.00, with earnings expected to double this year and the next.
This company was written about in this column a number of times last year. The stock serves to illustrate that you can make money in any market environment, as long as you own the right stocks.
First Solar pulled back significantly in value during the first three months this year, commensurate with the correction in the broader market. Like many other highly speculative, high-growth investment opportunities, this stock recovered. If you didn’t have the stomach to hold on throughout the volatility, you would have missed out on the stock’s recent capital appreciation.
A stock like First Solar is one that can be traded, and/or used as a long-term investment. Trading almost five million shares a day, this stock is highly liquid. The company is now valued at somewhere around $24.0 billion dollars.
It most definitely takes a lot of courage on the part of a trader or investor to be speculating in these kinds of high-risk stocks. The solar energy industry, which for years languished in relative obscurity, is now front and center in the alternative energy investment theme. This brings us to another important point of being successful in equity investing — timing.
So, a stock like First Solar illustrates to us that, in order to be a successful investor, you have to own the right stock, you have to have the courage to handle the volatility, and you have to do all this precisely at the right time or youll miss the major capital appreciation. Nobody said the equity speculation business would be easy.
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Tags: investment strategy, stock market
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Mitchell is a Senior Editor at Lombardi Financial specializing in small-cap stocks. He’s the editor of a variety of popular Lombardi Financial newsletters, such as Penny Stock Reporter, Micro-Cap Stocks, and Monster Profits. Mitchell, who has been with Lombardi Financial for thirteen years, won the Jack Madden Prize in economic history and is a long-time student of equity markets. Prior to joining Lombardi, Mitchell was as a stock broker for a large investment bank. While Mitchell is not working he enjoys fly fishing, motorcycling and tending to his hobby farm.
