TAN – Pass the Sunscreen, Please

By Chuck Gibson

As a part of the momentum stock selloff that occurred in May, solar stocks were severely punished, most losing 30% or more. The long term prospect for alternative energy, especially solar I believe is quite compelling. Being the tightwad I am, when I see an overreaction pushing prices unnecessarily low in an investment that has excellent long term fundamentals, I start to salivate as I smell an opportunity to make money.

TAN, the solar stock ETF, lost in excess of 30% during the March selloff, while the broader market index, the SP500, was able to eek out a tiny gain. That is quite a divergence. Solar stocks, like many other names had gone too far too fast, became overbought, overstretched and warranted a correction. The market faithfully provided just what was needed.

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