1 Day: $10,000 to $170,000

To illustrate the magnitude of possible returns, look no further than the options market.
An article exclusively published this Monday on seeking alpha called 1 company a sell and 5 a buy (article).

Today, First Solar warned that it would not make earnings or revenue forecasts. The market for solar energy is so dire that the company is changing its business model to adjust for the rapid decline in solar energy prices.

Had an investor purchased a December $35 Put, the return would have been a 12-fold return in a day:

Options can provide phenomenal returns, but an investor needs both bit of luck and skill in this area of investing. Most options expire worthless.

An investor needs to have an advantage over other participantsalpha.



First Solar's problems are big. Competitors were able to enter quite easily, tripling supply over the last three years. 80% of industry was subsidized. As the world now knows, government funding is constrained. The growth in supply to feed growing subsidies no longer applies.

In its conference call, the company said “The central learning from this experience is that open, transparent and uncapped markets cannot survive politically in an oversupplied industry with no entry barriers.” First Solar is now transitioning its business towards sustainable markets. This market was identified in its presentation as growing 5 to 10% per annum.

The main risk for investors is stated here:

“We believe this translates to a levelized cost of electricity, or LCOE, of $100 to $140 a megawatt hour, or $0.10 to $0.14 a kilowatt hour in most markets. As Mark will discuss, achieving these LCOE levels without subsidies will require the First Solar to reduce its manufacturing costs, increase module efficiencies, streamline operating expense and transition its business model to deliver superior returns at much lower gross margins than in the past.”

First Solar is now exposed to the regulatory and planning of the electricity market.

Uncertainty is high for investors bullish on First Solar. In that climate, risk aversion has risen, and share price will be under negative pressure.

Further reading: Crash-Proofing A $100,000 Portfolio From A European Crisis With These Companies

How To Save Your Portfolio: TradeFields

Seeking for Alpha is the only way to truly differentiate oneself from the masses and the herd.


Taken from seekingalpha's web site, 'Alpha' is a finance term referring to a stock's performance relative to the market; it's used more loosely by fund managers to describe beating their index - so every stock picker is essentially "seeking alpha."


The first step of surviving the stock market is to not lose money. As easy as it sounds, anyone invested in stocks or mutual funds, for that matter, will know that "waiting it out" or holding something "for the long term" does not constitute as a strategy for protecting from losses.


Taking decisive steps, and learning by doing, goes a long way. On a stock simulator app on Facebook, tradeFields is one way to take practice steps. 


In the last few weeks, my performance improved from months of "loss" to a gain of 20.10%:

Account Information
Short Balance	$3.00M
Long Balance	$355.35K
Available Cash	$8.66M
Spendable Cash	$8.66M
Account Value	$12.01M
Return:	20.10%

Holdings as of November 22 2011:

LONG POSITIONS
Company	Buy Price	Qty	Last Price	Market Value	Gain ($ | %)
GILD	$38.29	4,865	$38.76 ($2.50)	$188.56K	$2.28K
NVDA	$14.92	8,173	$15.04 ($0.41)	$122.92K	$966.86
ORCL	$31.00	54	$29.71 ($0.20)	$1.60K	$69.91
PANL	$44.62	988	$42.75 ($1.41)	$42.23K	$1.84K
THRX	$21.04	1	$21.78 ($0.26)		$0.74
SHORT POSITIONS			Total Long:	355K
Company	Buy Price	Qty	Last Price	Market Value	Gain ($ | %)
AAPL	$396.86	13	$375.57 ($6.56)	$5.43K	$276.79
FSLR	$42.44	29,565	$40.83 ($2.70)	$1.30M	$47.66K
GRPN	$22.71	891	$20.20 ($3.38)	$22.46K	$2.23K
LNKD	$71.88	2,891	$68.69 ($1.31)	$217.03K	$9.22K
NFLX	$70.96	2,085	$70.70 ($3.77)	$148.49K	$542.10
NVTL	$5.45	1	$3.00 ($0.14)	$7.89	$2.44
OCZ	$7.41	149,206	$6.08 ($0.15)	$1.30M	$199.14K
			Total Short:	$1.7M

The positive return was accomplished in a number of ways:

1. Short solar energy
2. Short Netflix
3. Short LinkedIn
4. Short Groupon
5. Long large cap technology
6. Long pharmaceutical and health care

For more real-time updates, follow tweets here.

How to Navigate Through This Downturn

The market's massive rally last week, on the back of many weeks of positive returns, should not be used to justify a positive return in mutual funds or stocks.

A tug of war exists between a positive desire for European's financial mess to be resolved, and the reality that creating more debt to resolve a debt problem is not a viable solution in the long term.

The point is not to cry about a financial market collapse: the point of any investor is to figure out how to minimize losses while maximizing returns.

Navigating through this downturn starts with formulating a thesis about the market. Central to the thesis is that stocks will be stuck sideways. Stocks will need to be sold at once price and bought back at another. What are the results?

Using kapitall.com as a "virtualized" portfolio planning tool, most equities were sold into the rally last week. The allocation is now 73% cash and 27% stock.

The total return since inception is 31.5%.

Holdings as of October 31 2011:

For further reading on what will happen next, stock picks are exclusively published on seeking alpha. Here is a list of these articles.