Investing in Solar Energy

I’ve been receiving a number of e-mails lately regarding the state of solar. More specifically, is solar’s run over.

Well, the answer to that question isn’t necessarily black and white.

Will we see solar stocks deliver gains in excess of 200%, 300%, even 900% this year? Probably not. Those days are over.

But that doesn’t mean the solar well has dried up.

In fact, with the recent market meltdown, we’re now seeing some of the smaller, less-popular solar plays, offer up a few quick opportunities on the heels of big money bargain hunters.

Take a look at Daystar Technologies (NASDAQ:DSTI) for instance.

Here’s a company that’s in bed with GE, yet because it’s not on the same playing field as companies like SunPower and First Solar, mainstream solar investors have ignored it.

Yet the stock hasn’t lost nearly as much as the likes of all those big solar players.

Moreover, aside from panic selling spawned by recession fears, there’s been few shareholders willing to give up shares of this thing. But for those who have been able to pick up shares below $4.00, the outlook is good.

Ever since DSTI hooked up with GE, the stock has never stayed below $4.00 before bouncing back over $5.00.

Take a look:

Had you put $10,000 on DSTI every time it fell below $4.00 in 2007 and sold at $5.00, here’s what you would’ve walked away with:

Total: $11,000

So on just $10,000 in, you more than double your money in one year. Just by playing the dips.

And guess what?

Thanks to this shaky market, DSTI is trading below $4.00 again.

When the smoke clears, this one will head right back to $5.00.

Want another?

Check out Solar Enertech Corporation (OTCBB:SOEN)

This stock hates staying below $1.00. When it falls below $1.00, it inevitably heads back to $1.20 or higher.

Take a look:

Had you put $10,000 on SOEN every time it fell below $1.00 in 2007 and sold at $1.20, here’s what you would’ve walked away with:

Total: $9,300

On $10,000 in, you nearly double your money.

Add that to your DSTI gains, and you walk away with $40,300 for the year-or more than double what you put in.

Again…just from playing the dips.

By the way, SOEN is trading below $1.00 again.

Risky Business

Of course, anytime you do this, you are incurring risk. It’s just the nature of the market. You look at your options, you decide which will give you the most bang for your buck, but with the least amount of risk possible-and you pull the trigger.

Though if you prefer long-term investing instead of this kind of trading, playing the dips this way is probably not for you. And that’s fine. Because while we can certainly make a quick 20% here or 20% there doing this…it’s the long-term investor, that ultimately walks away with the biggest gain. It just takes a bit more patience.

In any event, I figured I’d show you an optional way of playing the deflation of the solar market.

Overall, we don’t believe this will be a long-term trend. The solar market is strong, costs are coming down every day, and more and more states are requiring their utilities to provide some kind of renewable. Solar is one of the biggest. Especially out in California.

So don’t get discouraged by recession fears or sell-offs. They’re natural and necessary.

And if you are getting impatient during this bear market, and you have the stomach for it, you can always play the dips.

You can read more about this kind of trading here .

To a new way of life, my friend…and a new generation of wealth,

Jeff