Regular readers of my ramblings, god bless ‘em, will probably be aware of two separate things that are both relevant right now. First, I do my best to avoid politics on a daily basis, but often use anticipated trends in that area to make investing decisions, as the energy sector is increasingly political. Second, First Solar (FSLR) has been a great swing trading stock for me in the past.
Put those two things together and you come up with a trade in FSLR based on an anticipated trend in politics that I believe we will see over the next few months.
That trend is towards Donald Trump.
Please, please, don’t take that statement as evidence of a pro-Trump bias, or this sentence as evidence of a pro-Biden one. My general view of American politics is that most of the time it comes down to seeking the lesser of two evils. Even when I do have a preference, I try not to let it color my perceptions of the potential impact of politics on the market.
That is why last week, I recommended a strategy of fading any politics-based move in energy stocks as the election approaches. I pointed out then that the popular conception of Republicans being good for fossil fuel companies and Democrats good for alternative energy companies may be true in terms of their attitudes, but it hasn’t translated to moves in the relevant stocks. Big oil stocks have languished under Trump, while solar and other alternative energy stocks underperformed under Obama.