Bat got your tongue? We dare you to keep reading our special series on the World’s Scariest Stocks.

There's a lot happening in the investment world nowadays sufficient to scare the pants off you: threatened banking system collapse, talk of worldwide recession, record market volatility, and the simple unknown of when and where this roller-coaster ride will end.  But fear, well-founded or not, is an emotional response to a logical problem. Emotional decision-making does not serve us well as investors.

But paradoxically, this rampant fear makes now a great time to be a value investor. However, identifying money-making opportunities calls for tangible and rational decision-making based on a company's fundamentals. Applying such tools, I find that an old friend of mine, First Solar (NASDAQ:FSLR), is still filled with emotional optimism. In a normal market, I'd find that scary enough; in a market gone rogue, I think it's downright dangerous.

Your mother wears Army boots
It's been clear to me that First Solar was an emotion-driven stock ever since I called it the worst stock for 2008. I got more hate mail (questioning my background, intelligence, parentage, etc.) about that article than anything else I've ever written, suggesting that people's attachment to the stock was unsettlingly based on save-the-planet feel-good altruism rather than sober financial analysis. My questioning of its prospects meant I was an environment-defiling corporate apologist.

So ready the hate mail, because I'm calling First Solar out again for three reasons: It still ain't cheap, competing technologies have gotten much cheaper in a short period of time, and the controlling shareholders might be sniffing around the exits.

Not cheap enough
At the start of 2008, First Solar tipped the valuation scales at nearly 50 times sales and 200 times EBITDA. Today, those metrics are around 11 and 30 times, respectively. Driven there in part by the impressive rearview growth that First Solar has put up, but also by go-go investors largely abandoning the stock (it's about two-thirds off its high). The problem is that competitors like Suntech Power (NYSE:STP), SunPower (NASDAQ:SPWRA), and Energy Conversion Devices (NASDAQ:ENER) are cheaper still. According to CapitalIQ, competitors over $1 billion in market capitalization trade hands at just more than 3 times sales and 16 times EBITDA.

Moreover, now is not the time to be buying these expensive stocks when stocks of a much more entrenched and arguably preferred competing technology -- fossil fuels (in all of its emission-belching forms: oil, gas, coal) -- are getting cheaper daily. 

Perversely, and sadly for environmental wonks like me, falling prices for "traditional" energy sources removes incentive to spur growth of nontraditional energy sources like solar. Say what you will about high oil prices being murder on your gas tank and home heating bill, but it did get folks stoked (ha!, coal joke) about alternative energy. Today, a better investment bet might be found in oil maven ExxonMobil (NYSE:XOM) or coal purveyor Arch Coal (NYSE:ACI), now that energy derived from such sources is cheaper for your average Joe.

Not your average Joes
The other concern I have with First Solar is that it's still largely a company controlled by the scions of the Wal-Mart (NYSE:WMT) empire. The family still owns more than 40% of the shares even though they were selling liberally over this past summer. What happens if they seek a broader monetization or resume selling into any potential rally?

The Foolish bottom line
It's a time-honored story: Broad systemic change like the green revolution always takes longer than investors believe it will. Story stocks playing to the promised change like First Solar get bid up beyond any rational support for their stock prices, insiders start their exit, and the stock heads down, destroying the capital of the well-meaning "believer." It's the price of emotional investing. Thing is, even at today's price, the scare isn't over for First Solar investors.

Whether you agree that First Solar will continue to lag the market, or believe that it's just not that spooky anymore, tell us what you think in Motley Fool CAPS.  

Wal-Mart Stores is a Motley Fool Inside Value recommendation. Suntech Power Holdings is a Motley Fool Rule Breakers selection. Try any of our Foolish newsletters today, free for 30 days.

Jim "Spike in the Eye" Gillies owns no shares of any company mentioned. The Fool has a disclosure policy.