http://www.uncommonwisdomdaily.com/solar-golden-boy-gone-bankrupt-15902

Solar Golden Boy Gone Bankrupt!

Brad Hoppman | March 21, 2013

• Industry leader Suntech goes belly-up …
• Housing stocks shift into overdrive …
• Maybe money really does grow on trees …

Suntech was probably the last, best hope for mainstream solar power in our generation.
And just yesterday, they filed for bankruptcy in court.
The massive Chinese company was always a bit of a Cinderella story, and definitely a darling of the media. Founded by Dr. Shi Zhengrong just over a decade ago, Suntech quickly grew to become a titan in the industry.
With such cheap labor and direct access to a wealth of raw materials, some analysts thought it was only a matter of time before Suntech’s panels would start going up all over the world. “If anyone can do it,” the old line of thinking went, “then Suntech can.”
They were even seen as a serious asset by the Chinese government. So much so that they were “allowed” to pay off all their debts to government-sponsored investors and even run their company independently. Consider that China’s the largest communist stronghold outside of the continental United States; they’re almost as confiscatory as we are.
Unfortunately for Suntech, that was not to last.
Because right around the time Dr. Zhengrong started appearing on magazine covers in 2008, Suntech’s business started slipping. Solar panel prices started plummeting, and the Chinese company couldn’t manage a turnaround in time.
Then — just a few days ago — Suntech defaulted on some $541 million in bond payments … making them the first company to do so in all of history. Their bankruptcy followed soon after.
Taken on its own, Suntech’s bankruptcy is hardly a death-knell. Some sources are even putting a positive spin on the story, but I have trouble agreeing with that. We aren’t talking about airlines after all, where the entire business model hinges on routine bankruptcies.
No, when you throw this new fuel on the fire lit by Obama’s Solyndra fiasco, you’ll probably come to a much different conclusion.
The reality is that investors will probably take a good long while before taking solar power seriously again. And while I don’t disagree that solar might be the “fuel of the future,” it’s probably going to stay in that undefinable “future” for many years to come.
Meanwhile, back down here on Earth, the news was a bit more pleasant for homeowners and investors everywhere.
That’s because the U.S. housing market is continuing to pick up strength, propelling markets higher and providing a relieving boost to homeowners devastated in the crash just a few years ago.
Home sales are now sitting at their highest levels in years, with the sale price of homes up over 10% from where it was just a year ago.
And as a result of the strengthening market, KB Home (KBH) jumped to a new 52-week high following better-than-expected first-quarter results.
Revenue and net orders rose 59% and 40%, respectively, from the same period a year ago. KBH is the best-performing homebuilder stock so far this year, jumping more than 40% year-to-date. The company’s goal is to return to profitability by the end of this year, and with numbers like these, it definitely seems possible.
Speaking from my heart and not my wallet for a moment, I’m really delighted to see this new growth in housing.
It’s a concrete reminder that regardless of what happens, life goes on. No matter how big the crash, how devious the banks or how complicated the leverage, life still goes on.
Kids grow up. They go to school and get married. And when they want to have kids of their own, they buy a house. The house becomes a home, and a new family starts within.
Then the kids grow up, and the cycle continues as it has for ages.
High tide comes, low tide comes. Market crashes, inflation, wild profit opportunities — but through it all life goes on, and these new home buyers still have the chance to enjoy all the amenities we’ve been blessed with in our own lives.
It’s a nice reminder … a relief — especially in such turbulent times — to see that Americans are that much-more-resilient than some would like to give us credit for.
Now back to the wallet.
The SPDR S&P Homebuilders ETF (XHB), the most popular ETF to play the housing sector, is up more than 41% over the last year.
The performance of XHB over the past year is quite impressive considering the S&P 500 is up a little more than 11% over the same period.
Meanwhile, as the housing recovery continues to pick up steam, the demand for the materials to build (or rebuild) those structures will continue to increase. One easy way to lay a strong profit foundation in your portfolio is to invest in lumber demand through an ETF.
Timber plays can be some of the greatest plays in your portfolio — providing far more value than you’ll pay with the up-front price.
Tony Sagami just took over our International ETF Trader service last week, and he’s playing this very trend right now with a fund that’s up more than 22% over the past year, about twice the return of the S&P 500 over the same period.
Stay tuned for what I expect will be some great success stories from Tony and his subscribers on this powerful trend, along with many others to come!
Good Luck and Happy Investing,
Brad Hoppman
Publisher
Uncommon Wisdom Daily