Enterprising Investor Forum

We hope that most of you regularly pick up a copy of Barron’s but if you haven’t gone through the latest edition, we recommend you pick it up and turn to the article “Forecast: Clouds with Sunshine” written by Eric J. Savitz.

The articles gives a very good and comprehensive update on the solar industry, it’s difficulties and future prospects. As most people know, the big challenge is to produce solar energy at a lower cost than that of other alternative fuels. Furthermore, state aids and overall hype means that this sector has become very crowded and might have gotten a bit ahead of itself for the time being.

No doubt that long-term this will be a winning bet but with governments like Germany and Spain (the two biggest markets worldwide) reducing aids and other short-term disappointments, investors will have to carefully decide with which companies they want to place their bets.

It could be pretty bad until about 2010…. these companies will risk being overcapitalized until then!

Enjoy!

Here is a good update from AP on recent developments:

More to come….

Here is a short video interview where Jamie Dimon gives his take on Bear Stearns:

Jamie Dimon also gave a really interesting speech at the FDIC Mortgage Conference in Arlington, Va. He was cleaver, witty, candid and refreshing. If you didn’t get a chance to follow this, we seriously recommend that you do so. It is currently posted on DealBook: here.

Enjoy!

Buffett-mania simply gets crazier every year. A Chinese investment fund manager just won the charity auction to have lunch with Mr. Buffett with a final bid of $2,110,100!

The winner is Zhao Danyang of the Hong Kong-based Pureheart China Growth Investment Fund. Last year Mr. Pabrai had the pleasure of winning the auction for $650,100.

As per the press release, Mr. Danyang and up to seven friends will dine with Warren at the Smith & Wollensky steakhouse in New York whenever they can manage to schedule it - hopefully Mr. Danyang isn’t too busy!

Ever wonder what Davos is all about? What the World Economic Forum really is? Here is n interview with Klaus Schwab the Founder and Executive Chairman:

Enjoy!

This is an interesting CNBC interview with Jim Rogers where he discusses his outlook for Asia and commodities:

He did mention that very few investors where able to buy commodities but now that funds and ETFs have allowed practically anyone to participate in this run-up, does this mean we are in the bubble he is talking about?

Enjoy!

This is a very interesting interview where T. Boone Pickens talks about oil and the need for new energy sources.

With the US consuming 25% of the daily world production of oil - with on 5% of the world population - it is not difficult to see that this situation is simply not sustainable.

Oil cost every year in the US represent 4 times the cost of the Iraq war and it is high time that the US starts to seriously focus on other sources of energy available on home soil:

1. Coal
2. Natural Gas
3. Nuclear
4. Wind
5. Solar

You might not agree with T. Boone but this is a thought-provoking interview:

We’ve had a couple of emails from readers asking us about ’short selling’ and ’short interest’. Whilst, strictly speaking, this is not really one of our recommended strategies, here goes some info on the topic:

• Short Selling: this means that you sell a stock, commodity etc, that you do not own. In order to sell it, you have to borrow it from someone else with the obligation of giving it back - by buying it back on the open market. One would sell short is he/she thinks that the price will fall, thereby meaning that you would buy it back at a lower price than what you paid for it. Your profit would be the difference, basically the opposite of going long! Please remember that when you buy a stock, if it goes to zero you would lose 100% of your investment. However, if you short a stock, there is no limit to how high it can go before you manage to buy it back and you could end up losing more that your initial investment.

• Short Interest: the total number of shares that have been sold short. Usually, it is showed as a percentage. For example, 5% short interest means that 5% of the outstanding shares are held short.

• Days to Cover: based on the average daily volume of a share, it indicates how many days it would take all the shorts to buy back the shares they need to give back. For example, if a company has a daily volume of 5 million shares, and 10 millions share sold short, then it would take the shorts 2 days to cover.

• Short Squeeze: when prospects for a stock change for the positive and the price start to rise and investors who sold short need to close their short positions. This rush to buy back the shares, in order to cut losses, will force the share price higher very quickly.

This is the link to an good and more extensive video summary of the above:

http://youtube.com/watch?v=sj5EKg80yKQ

Enjoy!

With the oil price at an all time high, we hear more and more talk about ‘Peak Oil’ but what does this really mean? This theory refers to when the maximum rate of global petrol production is reached, after which the rate of production enters its terminal decline. If the global consumption is not tackled before this peak, there will undoubtedly be an energy crisis due to the drop of supply and rise of demand.

Here is a CNBC in depth interview on the subject: