Is shorting solar companies a worthy green investment?
Better just to stay away?
October 20, 2011
Gordon Johnson of Axiom Capital has been a big solar bear in recent months because Johnson believes that the solar industry is extremely over-supplied, and his calls have been spot on.
Today, Mr. Johnson was interviewed on CNBC and he claimed that he still has a sell rating on all the major solar companies, and Johnson suggested that only way to make money off solar stocks was to short them. Overall, Johnson claimed that solar stocks could still fall another 40 percent, and said these big declines in value have not yet made solar stocks a value trade, but value traps.
So, is shorting solar stocks a virtuous way of making money?
That’s what I’m wondering today. If one were to be an investor/trader with a specific focus on green investing, is shorting green stocks evil? Is it simply part of the business?
I mean if you’re going to spend your time following companies and you believe their stocks are over-valued, do you just wait until they hit your price target, or is it OK to short them?
My gut says just wait until they hit your target, but is that naive investing?
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