I hope you had a terrific Christmas . . . and I mean that in the most heartfelt secular humanist way. I did. I was surrounded by terrific nieces and nephews. I formed what I truly believe was a meaningful bond with our twelfth (give or take), Patrick, age 1, who seemed genuinely to respond to my humor.
I got everything I asked Santa for except world peace and an end to the writers’ strike, without which I am in excruciating limbo. Help! I am clueless to the unfolding of the Darling Family fortunes, Chuck‘s exploits, The Office romance, and – my God – Liz Lemon, Jack Donaghy and Tracy Jordan . . . what have they been doing?
I admit it, I love TiVo-enabled commercial-free television. And that’s as good a lead-in as any to today’s topic.
Today’s topic is WORLD-CHANGING TECHNOLOGICAL PROGRESS.
- That’s what television was . . .
Bob Novick: ‘Aaron Sorkin’s play is HIGHLY HIGHLY exaggerated if not outright lies. Farnsworth won the court decision and was awarded one million dollars (in the 1930s). It was the only patent suit that RCA had lost up until that time. There are major inaccuracies in the play – this site lists them in detail. Philo T. Farnsworth truly was the father of television.’
☞ One of the books Sorkin based his play on, The Last Lone Inventor, by Evan Schwartz, makes that case. But a Brit reviewing it on Amazon, says no. (‘The American audience will love this highly readable popularist book. This is flag-waving entertaining stuff. Enjoy it, but please try to understand that this is not the whole story.’) I still loved the play, and this after-reading just adds to the fascination.
- And that’s what cheap solar energy would be . . .
In the winter of 1974 I had a cover story in NEW YORK Magazine about the potential for solar energy. I knew it was important – OPEC and Mideast oil were all anyone could think about (except Detroit’s executives, who would spend the next three decades in denial) – but I was surprised to learn my piece was going to be the cover. It seemed a bit of a stretch to have the piece in NEW YORK at all, let alone the cover. What was famed editor Clay Felker thinking?
It turned out he was thinking, ‘Let’s sell some magazines!’
He put a gorgeous model in a bikini absorbing rays on a float in the middle of a swimming pool. In February.
I’m not certain how well the issue sold, but finally, nearly 35 years later, solar energy is becoming sexy on its own.
You could (for example) have done very well buying First Solar (FSLR) at 24 when it went public a year ago (I missed it); less well shorting a few shares as I did this fall at $160 (it closed yesterday at $281, up more than tenfold).
Although this stings a bit as an investor, I’m delighted to think we are finally at the point, or nearly so, that solar panel film can produce electricity at competitive prices.
To say I am not expert in this field would be an understatement on the order of ‘the sun is rather hot.’ But according to this, FSLR’s cost of producing a watt of solar power was $1.16 recently . . . and according to this, a privately owned competitor called Nanosolar has begun selling its panels for 99 cents a watt, which (according to this) it manufactures for 30 cents . . . which puts the cost of solar below the cost of coal.
This is great for humanity, but not necessarily good for FSLR. If your competition can sell your product for less than it costs you to make your product, you could have a problem. Then again, who knows what tech advances FSLR may have up its sleeve or what economies of scale it might achieve (or whether these reports are even accurate). And the market for competitively priced solar power will be so vast, a lot of inefficiencies may be forgiven along the way.
So to be clear, I am not suggesting you short FSLR – or anything else. As I have often argued (here, for example), shorting stocks is, ordinarily, a really bad idea . . . a proposition I test out every so often on your behalf just to be sure it’s still true.
[Another bad idea I am testing out for you (think of me as the dummy in one of those crash tests that ultimately help to keep the rest of us safe): selling naked FSLR calls (a terrible idea, because, as with shorting, you have a potentially unlimited loss; but unlike shorting, you have a smaller potential gain if you’re right). I am doing this because the excitement over FSLR is such that today, with the stock at $281, someone paid me $76 for the right to buy FSLR from me at $300 any time through January 17, 2009. That way, if it crashes, they lose ‘only’ $76 (which I get to keep); but if it goes to the moon, they make (and I lose), $1 for each dollar the stock has risen above $376. So it’s a way for me to short the stock at $376, in effect, when it’s selling at $280. What I give up for that cushion is anything beyond a $76-a-share gain.]
Important note: I am not winking when I say this is a really dumb thing to do unless you have a lot of experience in the market and even more experience knowing your own psychology. And even then it may well be a dumb thing to do, as my experience will likely shortly prove.
THE MAIN THING: CAN YOU IMAGINE?
WE’RE GETTING CLOSE TO A BIG STEP TOWARD CLEAN, AFFORDABLE ENERGY.
Don’t Sell Humanity Short Quite Yet.