Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: LDK Solar
So What: There has been uncertainty about U.S. complaints that the Chinese government is subsidizing the solar market this week. Today, China also announced a 0.25% increase in interest rates, bringing about rumors that China will allow its currency to rise versus the dollar with the G-20 Summit approaching. This would make Chinese solar panels more expensive abroad and thus bring lower demand.
Now What: LDK Solar led solar shares down today, but I wouldn't panic at this sell-off in the sector. The solar market has risen recently on increasing confidence that 2011 will bring strong demand, so I see today's sell-off as a correction, knowing the volatility in solar. I don't see today's panic as a reason to change your investing thesis in solar. The correction may take a few more days, but after the G-20 Summit, we should have more clarity from China on all of these issues. You may want to save your buy orders until then.
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