Account Information

  • My Account

    Manage all your subscriptions, update your address, email preferences and change your password.

  • Help Center

    Get answers to common service questions, ask the analyst or contact our customer service department.

  • My Stock Talk Profile

    Update your stock talk name and/or picture.


$1,230 in Instant Income?

$1,230 in Instant Income?Our top income expert recently pulled the wraps off his breakthrough moneymaking technique. And he proved beyond a shadow of a doubt how you can use it to generate instant cash payouts of up to $1,230 (or more). Over and over again. But then he took things a big step further and guaranteed you can make $1 million by following his program. And the second he did, our phones went nuts! Space is limited — get the details here.



The Downside of Time Travel

By Robert Rapier on February 21, 2017

JinkoSolar Holding (NYSE: JKS) has overtaken another Chinese company, Trina Solar (NYSE: TSL), as the global leader in solar photovoltaic (PV) module shipments, based on 2016 numbers recently released by the research and consulting firm GlobalData.

Given the explosive adoption of solar PV — it’s a $40 billion market that has grown by an order of magnitude since 2009 — one might expect JinkoSolar’s stock to have soared.

Imagine that in February 2012 you are armed with the knowledge that JKS would become the world’s leading solar PV supplier within five years. You probably would have concluded that this would be a good long-term investment. And strictly speaking you would have been correct, as JinkoSolar’s share price is up 90% since.

But — and this is the point I want to drive home today — the key to that performance is “long-term.” It was actually a wild ride.

But let’s say you invested in JKS in February 2012. By the summer of 2012, your investment had lost about 75% of its value. You might have lost patience and thrown in the towel. But then shares went on a run, and a year later you were actually back to positive territory, but just barely. Your first-year return was 12%, but you had to endure a 75% loss and hang on in its wake to achieve that.

But then the price started to drop again, and by the end of March 2013 you were once again looking at a loss of about 50%. Understandably, you might again be ready to throw in the towel, but remember that you are armed with the knowledge that JKS is going to first place in a hot sector.

Then shares went on an epic run. From a 50% loss at the end of Q1 2013, by November 2013 you would have been looking at a gain of 300% in just over 18 months. Of course, since I’ve already stipulated the five-year return is 90%, that means the share price has declined dramatically since, despite exponential growth in the solar market, and JinkoSolar’s climb to #1.

Put it all together, and JinkoSolar’s past five years in the stock market look like this:

Source: Google Finance

So JinkoSolar’s five-year performance is pretty good, as you might expect, but the ride has been extremely rocky. This also highlights the advantages of the long-term investing discipline I advocate. Despite the incredible growth of the solar PV industry and JinkoSolar’s rise to the top, if you had missed out on that surge in the second half of 2013, your five-year returns would have been very disappointing.

There are two takeaways here. The first is that short term investors can easily miss out on the benefits of long-term trends. (Of course that goes both ways; had you only held the company in the second half of 2013 you would have made a killing). The second is that the solar sector isn’t for the faint-hearted. It can be extremely volatile, but also extremely rewarding. I suppose another takeaway could be that a rising tide doesn’t necessarily lift all boats, as #2 TrinaSolar’s five-year stock-market return is a whopping 6%.

The solar sector has sold off since Donald Trump won the presidency, but we still think the sector has promise. Join as at The Energy Strategist as we identify and recommend the strongest stocks in this fast-growing sector.

I would also like to make another pitch to subscribers to join me, my colleague Igor Greenwald and the rest of the Investing Daily team at our exclusive Investing Summit on April 6-7 in Old Town Alexandria, Virginia. We will discuss our best investment ideas for 2017, so reserve your seat now.

(Follow Robert Rapier on Twitter, LinkedIn, or Facebook.)


You might also enjoy…


R.I.P Bull Market—Here’s How To Protect Your Wealth

I hope you’ve enjoyed the phenomenal bull market of the past eight years…

Because it’s about to come to a screeching halt.

The Federal Reserve’s nearly decade-long spending spree has finally come to an end.

With no other options left at their disposal, the Fed has no other choice than to raise interest rates to keep inflation in check.

And that leaves you with two options…

Do nothing and suffer the agony of watching the profits you’ve accumulated over the years evaporate right before your eyes…

Or reposition your portfolio and invest in companies which prosper as inflation rises and interest rates soar.

I think the choice is clear. And I’ll show you the best new positions you can take if you click here.

Stock Talk — Post a comment Comment Guidelines

Our Stock Talk section is reserved for productive dialogue pertaining to the content and portfolio recommendations of this service. We reserve the right to remove any comments we feel do not benefit other readers. If you have a general investment comment not related to this article, please post to our Stock Talk page. If you have a personal question about your subscription or need technical help, please contact our customer service team. And if you have any success stories to share with our analysts, they’re always happy to hear them. Note that we may use your kind words in our promotional materials. Thank you.

You must be logged in to post to Stock Talk OR create an account.

Create a new Investing Daily account

  • - OR -

* Investing Daily will use any information you provide in a manner consistent with our Privacy Policy. Your email address is used for account verification and will remain private.