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.
Interested in more info on LDK Solar? Add it to your watchlist by clicking here.
Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings, or follow his Motley Fool CAPS picks at TMFFlushDraw.
Try any of our Foolish newsletter services free for 30 days. True to its name, The Motley Fool is made up of a motley assortment of writers and analysts, each with a unique perspective; sometimes we agree, sometimes we disagree, but we all believe in the power of learning from each other through our Foolish community. The Fool has a disclosure policy.
More from The Motley Fool
Can LDK Solar Survive Against JinkoSolar and Yingli Green Energy?
Chinese solar stocks have all rebounded, but LDK Solar is still in worse shape than JinkoSolar and Yingli Green Energy. Find out why.
The Fool Looks Ahead
A short week will be long on news.
This Week's 5 Dumbest Stock Moves
These five companies got it wrong this week.