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Liking or Leaving LDK (Question of the Week)

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I've already given my reasons for not investing in either solar or satellite radio in an earlier posting. Here we have a booming industry but know that most of the companies directly in it will fail. However, as others have pointed out you can still ride that kind of rocket by investing in secondary companies providing goods and services to all those winners and losers. As a provider of multicrystalline solar wafers, polysilicon materials, and wafer processing services, LDK almost falls into that category. I say "almost' because (again as others have pointed out) photovoltaics, too, is a rapidly advancing industry; so their products and services could quickly become obsoleted. Nevertheless, when a country, city, homebuilder or individual decides it is cost-efficient to switch to solar they have to start somewhere. Should they wait for next year's developments and buy expensive petroleum products for an additional 12 months?

In LDK's favor, they are based in China, a country which is serious about alleviating its horrible pollution problem and has the money to fund their efforts. So China may encourage solar energy to replace coal in their own country as well as producing components for export.

On the other hand, China's inexpensive production of polysilicon is dumping an increasingly nasty amount of toxic waste into their environment! The inexpensive production will become more expensive when the country imposes environmental controls.

We all know there's no such thing as a free lunch but we just keep hoping.

If I were investing in solar, LDK would be a leading contender for a place in my SLO2 portfolio. But I'm still holding off.