That’s another great piece of advice which Klarman mentions and is a stepping stone on most investing paths.

Current Holding

With that in mind and sticking to what I know well Suntech has great stats,

Cash flow is still elusive.

The Challenger

AXP has fallen far enough to be worth a look. My gut says still too early to buy and my twenty second look said still not large enough margin of safety. Getting across the three major card companies would seem sensible. When will their quarterly lows likely be? The following chart is a month old and shows how the S&P were predicting this to be the worst quarter for earnings. I must check their opinion now!

Status Quo and WINS provides an some cash

I’d take STP now. I know them. Have bought, sold and traded options on them for a couple years now and followed them since the IPO. The major risk for STP is not their lack of cash flow, though irksome as that is, the major risk is “one trick pony” syndrome. Can STP continue to evolve and grow as a significant player in alternative energy. Look at UTSI as one of the many examples of a company with good tech that didn’t adapt, great earnings for a while, before they fell. Another risk is commodisation.(sp?) solar becoming commoditised. Their death is not imminent on either front, but both along with cash flow the main risks are worth keeping an eye on.

I’m looking at adding to SunTech. My WINS holding is getting bought for $6.25 and jumped an outlandish 125% the other day, right back to what I paid a year ago Which is a relatively great out performance of the indexes and with no capital loss an acceptable absolute outcome in this volatile bear market. WINS closed at $5.50 and the all cash deal is expected to close late 08 or early 09. Looks like a good probability of closing. I want to be fully invested now and believe I can get better than WINS.

I give STP 60% chance of 2-5 bags over the next five years, 20% for a single base, 20% for permanent loss of 40%.  For a two way split risk/reward I call STP 1/4. That’s seven dollars (40% down) and $28 up.  Earnings are due out the day before November otpions expiration. You get the feel good factor of investing in alternative energy for free and helping in get solar to grid parity. Everyone’s roof and eventually all building materials will have solar fixtures and coatings. Wind is another important opportunity. STP and GE are my two alternative energy picks. Both are attractive at current prices.

Related posts:

1. Don’t Believe You’re Right
2. Suntech Achieves 1GW and 1MW
3. Fusion Portfolio Buys Suntech STP
4. Suntech Power’s Day in the Sun
5. Localisation killed the distribution star
6. Suntech (STP) I wish you were lower