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Comment by jimbokun | Hacker News Reader

'Despite the buck-per-watt announcement, First Solar's share price plummeted more than 20 percent on Wednesday, thanks to warnings from CEO Mike Ahearn about the effect of the credit crisis on potential solar customers—as much as 10 to 15 percent of current orders might default. He recently told analysts in a conference call that "as good as things look for the mid-term and beyond, the short-term outlook for the solar industry in our view has never looked more difficult."'

Sounds like a good time to buy and hold.

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Not sure any of these players are great "buy and holds" as the race is far far from over. First Solar is just one of a handful that look like they're breaking the $1/watt milestone. Another promising one is http://nanosolar.com/

Then you have to look at how cheap natural gas will be over the long term - particularly given the new and massive abundance of shale gas. Gas in particular has the potential to push out adoption of solar. If there's one thing for certain, it's that coal fired power is going to be largely replaced - but the question is by what. Nevertheless, that firms are breaking the $1/watt barrier, is very good news for end users of power.

What do you think you know that other market participants don't?

You can't beat the stock market by buying companies that look like they'll do well. http://lesswrong.com/lw/yv/markets_are_antiinductive/

Wouldn't this only hold true in perfectly efficient markets? It also seems to assume that every market participant is under the same influences. I don't care how well my holdings are doing at the end of an accounting year but a fund manager likely will.

Try reading the linked post Eliezer linked to and see if you still have that question

My comment was in response to having read the linked post.

Having just finished reading it for a second time I'm still not clear. Eliezer does say, "Nobody believes the market is really "efficient" [...] but still, the market does not leave hundred-dollar-bills on the table if everyone believes in them." I'm possibly arguing against a position which has not been given but I sense there is more than this and I can't identify it.

OK, then I think the answer is that yes, of course it is possible for an individual to beat the market. It just takes luck. It's nearly impossible for you to know if you are winning because you are truly better at picking stocks than the market or if it is just luck -- but most of the time, it's going to be luck. It is a very rare investor that can consistently make much more than the market as a value investor by buying and holding long.

I can certainly agree with that. Not understanding that a choice can turn out well despite being made for bad reasons and vice versa is a frequent source of annoyance for me in others and, if I'm honest, myself.

Thanks for the follow up.

You could simply have a different motivation than most market participants. If most trades are executed considering only next year's P&L statements, but you are more interested in what happens over the next 20 years, different strategies may very well be appropriate.

I like your essay on anti-inductive markets, it is often counter-intuitive how markets are different than falling apples, etc. But another thing to consider is how one might take advantage of the fact that so many market participants do not seem to understand the anti-inductiveness of markets. For example, a handful of investors made killings by finding ways to short the real estate market, at a time when many investors were treating real estate prices like falling apples.

Summary: There are people smarter than you, with more information and with more incentive to find information than you to make whatever insight you think you have about market prices unactionable. For almost all values of you.

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