Short Selling Skeptic Cashing In On Solar Company Collapses


Guest essay by Eric Worrall

Gordon Johnson of Axiom Capital Management Inc. is the short selling 3rd Avenue Financial Analyst Solar Energy companies are learning to hate. His business is making money from the the failure of unsustainable renewable business models.

Guest essay by Eric Worrall

The Most-Hated Bear in Solar Isn’t Backing Down

by Brian Eckhouse
16 February 2017, 20:00 GMT+10 17 February 2017, 15:01 GMT+10

When Elon Musk’s SolarCity hosted stock analysts about a year ago to gush about its prospects in the solar industry, Gordon Johnson was nowhere to be found.

It seems that Johnson, a 36-year-old analyst at boutique advisory shop Axiom Capital Management Inc., wasn’t invited. This may not have been an oversight; it happens to him a lot.

“Everybody hates me,” says the New York-based analyst in jest, acknowledging his reputation as solar’s notorious bear, a soundbite-ready contrarian among a group of analysts generally bullish on the industry’s long-term prospects. “Companies don’t like me because I have sell ratings on their stocks.”

These days, Johnson has a sell rating on every stock he follows (including some steel companies), and he has a fresh reason — Donald Trump. Johnson figures the president, a renewables critic during the campaign, may attempt to revoke federal subsidies for solar — a minority opinion, to be sure. “It would be a big negative for renewables, particularly solar,” Johnson says. Tax reform would also hurt.

A solar skeptic since his tenure at Lehman Brothers a decade ago, Johnson isn’t beloved among the companies he covers, not to mention other Wall Street solar analysts. Some observers view him merely as an ally of the hedge funds and other short-sellers that are his clients, and sometimes just lucky in playing what they call the solar-coaster.

Johnson’s contrarian view derives from a simple thesis: solar, he says, can’t compete with, or replace, natural gas because it can’t provide around-the-clock power and because it has needed subsidies to be competitive.

Read more:

Short selling is heavily maligned in the popular press, where reporters often characterise it as a dangerous game played by wreckers.

The reality is a successful short sell usually only works if the targeted company is already a wreck. Short selling clears the fog of spin, revealing the ugly reality beneath the glossy brochures and rosy, overhyped forecasts. Short selling forces worried investors to ask uncomfortable questions – questions target companies often wish remained unasked.

I doubt Johnson is going to run out of renewable companies to short sell.

The article details some cases when Johnson got it wrong. The kind of trading activity Johnson facilitates is potentially high return, but in my opinion it is also high risk – get it wrong and you can lose your shirt. Your money, your risk, your responsibility.


139 thoughts on “Short Selling Skeptic Cashing In On Solar Company Collapses

  1. Of course, the renewable fraud is that its proponents are ALWAYS claiming it to be now economically competitive with reliable power sources, BUT, for some unexplained reason, it still needs large govt subsidies. From both the Feds and the state.

      • This is mostly true. RE projects only capture part of the value of the tax incentives. Because they aren’t refundable, the project owners are forced into complicated tax agreements – mostly with big investment banks. Public data is hard to come by, but something like half of the value of the subsidy is a donation from taxpayers to Goldman Sachs. No points for guessing who lobbies most strongly for the tax rebates to be non-refundable.

        This tax structure also prevents project developers from using low cost finance from non-profits like municipals and cooperatives. No tax appetite, so non-refundable tax rebates are worthless.

        Take away the 30% solar ITC and the 10 year $23/MWh wind PTC (averages out to about $10/MWh over the project life) and the actual net increase in cost of energy from these projects is likely to be on the order of a few dollars per MWh.

        We’ll still have utility scale wind in the $20s and solar in the $30s. They don’t provide firm capacity, but they do reduce fuel consumption and other variable operating costs. Depending on your projections of future coal and natural gas prices and your generation mix, you can justify some projects just on economics.

      • Chris, not that old lie again. Fossil fuels get no subsidies. Period.
        Taking what amounts to a depreciation allowance, exactly as every other company in the country takes is not a subsidy. Despite the desperate lies of the alarmists.

      • Re: Chris the deceiver

        “No money

        from the U.S. Treasury

        goes to

        the oil industry.

        – Washington Post

        Since 1913, oil & gas firms have deducted the upfront costs of exploration and production … .

        U.S. taxpayers that pay foreign taxes on foreign income can take a credit to avoid double taxation. … .

        The oil & natural gas industry already pays more than its fair share. From 2007 to 2012,
        its effective tax rate averaged 44.6%.

        That’s higher than any other industry.

        (Source: )

      • “… fossil fuels get 4X the subsidies of renewables.”

        OK, now recalculate that on a per MWhr basis. Fossil fuels produce about 30 times as much energy as renewables according to the pie chart for 2013 here:

        Now subtract the taxes raised from selling the various fuels.

        Bear in mind that some “subsidies” work like this: I make a rule that says that you owe me $10 million. Out of the goodness of my heart, I let you off $4 million. Now you owe me only $6 million and I am subsidising you to the tune of $4 million. Bargain!

      • Janice, your source is the American Petroleum Institute? Haha, that would be like me posting subsidy information sourced from the Energy and Policy Institute.

      • @ vboring the confused:

        The engineering consultancy Mott MacDonald … calculated the “levelised generation costs” for several technologies … . These costs are sometimes called the “life cycle costs”, emphasising the “cradle to grave” aspect of the definition.

        {T}he costs of wind generation as calculated by Mott MacDonald significantly underestimate the true costs. The discussion below shows that the inclusion of the additional costs associated with wind generation
        radically undermines wind’s relatively favourable cost position.

        Before the additions of the carbon costs (chart 2a), coal and gas remain the cheapest technologies, with nuclear a close third. …

        {E}stimates by Mott MacDonald flatter wind-power as they made no allowance for any add-on costs. One of the main reasons is that wind-power is unreliable and requires conventional back-up generating capacity …

        additional costs:

         — The Extra System Costs, which refer to the costs of fast response plant to address {} intermittency, …

         — The Planning Reserve, which refers to the need to maintain an under-utilized conventional fleet equivalent to peak load (plus a margin) to cover periods when output from the wind fleet falls to extremely low levels …

         — Required Transmission, which describes the cost of grid needed to transport energy from wind sites to consumers. …

        Incorporating the additional costs, and taking our two chosen Mott MacDonald cases as illustrations, the cost of onshore wind would become quite uneconomic and offshore wind even more absurdly expensive.

        (Source: )

        Executive Summary:

        EROEI (and ROI, but for taxpayer/rate payer subsidies) for wind is perpetually NEGATIVE.

      • Further to vb the confused:

        Facts about Solar and how grossly inefficient it is

        Ozzie Zehner “Solar Power and Other Fairy Tales”


        Ozzie Zehner “Green Illusions” (to about 15:00)


      • @ Chris: When you refute the evidence asserted by API, only then will you have said something useful, here.

      • Argh. Poor vb, he or she will never figure this out, now, lol. The second video should have been THIS one:

        Ozzi Zehner “Green Illusions” (to about 15:00)


        I apologize for the mess. Please forgive my mistake.

      • They include subsidies, frequently do not include startup costs (just service and maintenance) as well. When you don’t include the capital required to build something profits look pretty darn good.

      • There are subsidies to fossil fuels, but they are generally much lower than renewables. There is a lot of faux information on this subject. Of course, the numbers that Chris sites has a few errors. First, these are worldwide subsidies, not US. A number of nations subsidize fossil fuels when they have national oil companies. Nobody should be against eliminating those, but we don’t have a lot of pull over nations like Turkmenistan. The US subsidies to oil companies is a paltry $4.9 billion — not zero, but pretty small.

        Sometimes, reports add all sorts of nonsense as a “subsidy”. For instance, BP was allowed to “deduct” the cost of cleaning up the Gulf Oil Spill as a cost of doing business … isn’t that an accurate reflection of what it was? We tax profits in this country, not revenue. And, of course, many people include the “Social Cost of Carbon” as a subsidy.

        The second errors of Chris’s numbers is that those figures need to be normalized to the energy unit. Worldwide, fossil fuels generate 67% of electricity whereas renewables generate 5.7% (hydro and nuclear generates most of the rest.) However, electricity is only 18% of world energy consumption. Total energy is 78% fossil fuels and 4.5% renewables (not including hydro, nuclear, or biofuels.)

        So, fossil fuel is 17x the usage with 4 x the subsidies — Iran, Libya, Venezuela and Turkmenistan are the biggest.

      • “$490B in fossil fuel subsidies compared to $135B for renewables”
        All you need to know to see how absurd this statement is — Saudi Arabia supposedly subsidies oil the most with $73B in 2013 when the price of oil was high and Saudi Arabia as a country and government was absolutely flush with income making over $200B. Saudi Arabia is absolutely rolling in profits from the sale of oil, NOT subsidizing oil. This analyses of “subsidies” is absolutely bogus.

      • Chris how typical of you. Instead of actually dealing with data that refutes your claim, you attack the messenger.
        Thank you for admitting once again, that this is all you are capable of.

      • One of my local Councillors (UK) went on record in support of a planned solar farm near me saying it would slash fuel bills and poverty, telling us that the ‘[community] should benefit from this plan [with lower bills]’. what a waste f space he is – as will also be the solar farm.

      • $490B in fossil fuel subsidies compared to $135B for renewables – fossil fuels get 4X the subsidies of renewables
        nope. those are standard business deductions for expenses and depreciation. the problem for renewables is that these deductions are only available to businesses that make money and thus pay taxes. no profit, no tax, no deductions.

      • “Chris February 20, 2017 at 8:50 am
        When they say fossil fuel-based power plants are cheaper than renewables, they are including the subsidies in their calculations. $490B in fossil fuel subsidies compared to $135B for renewables – fossil fuels get 4X the subsidies of renewables.


        But first, a word for our pixie Janice who did an excellent job telling the truth about the lies Chris and vboring wilfully and maliciously spread.

        Great job Janice!!

        Chris, of course, responds to Janice with an accusation that she is using a biased source, the American Petroleum Institute.

        Chris forgets to mention that the API gets their data direct from members that pull the information from their financial reports. Reports that would cause Federal penalties and sanctions if erroneous.

        While Chris does use information:
        A) From a biased reporter, who failed to link any credible facts. Yet pulled his information from the IEA “International Energy Agency”. An organization fully under the control of Brussels and their energy madnesses.

        Some interesting facts about IEA’s method of calculating ‘subsidies’.

        From IEA:

        “An earlier Greenpeace study estimated total European Union energy subsidies during the first half of the 1990s at $16 billion, of which 63% went to fossil fuels, 28% to nuclear and a mere 9% to renewables.”

        Sure, and that is not a biased source…

        More excerpts:

        “The IEA has defined energy subsidies as any government action that concerns primarily the energy sector that lowers the cost of energy production, raises the price received by energy producers or lowers the price paid by energy consumers. This definition has been widely adopted.”

        “For example, some studies include even the cost of defending oil supplies from the Arabian Gulf, which greatly adds to the overall size of subsidies.”

        “put the total value of energy subsidies in those countries – as measured by the difference between actual and estimated market prices”

        The IEA definition allows the eco-looney to define almost anything as a subsidy, so long as they can gerrymander it as a benefit or cost reduction to fossil fuel.

        Isn’t that great, LG, natural gas is docked a subsidy for the gas used to make carbon fiber composites necessary for wind turbines. Along with the fuels used for smelting and refining metals, factories necessary to produce industrial bearings, electrical coils, etc. etc.

        Just how devious can eco-loonies be? The lousy gits.

        Then, someone has been tallying up their estimates for military protection as subsidies for fossil fuels.
        Protection that extends to all shipping in the patrolled areas, including any solar arrays or wind obstructions.
        Nor are the world’s militaries happy to post costs for military presence in specific shipping channels.

        I wonder if they tallied the costs of quenching the oil wells Saddam caused to be set on fire, as subsidies for fossil fuels. Their wording does support that tally as justified.

        From IEA via OECD:

        “Based on IEA modelling using subsidy estimates based on the price-gap approach, relative to a baseline in which subsidy levels remain unchanged, if fossil-fuel consumption subsidies in the economies captured by the IEA survey were completely phased-out”

        Price-gap is the latest name for the IEA method of tallying subsidies, via a model.
        Instead of trying to tally up government published accounts, the price-gap allows the ‘model’ to determine what a fossil fuel’s price should be, versus what the actual price is.
        This Price-gap includes a “cost of carbon” estimate as part of the proper total cost that should be charged.

        Countries that are then represented as massively subsidizing fossil fuels are those countries that market fuels directly to their citizens; e.g. Saudi Arabia, China, Russia, etc.
        Socialist countries really rack up subsidies by not overcharging their citizens.

        Still, as in so much of the alarmists’ dependence on a fake world of models; the IEA uses their fossil fuel subsidy model to invent imaginary subsidies.

        Chris is, as we all know, incredibly wrong and guilty of a classic yet absurd use of the “red herring” logic fantasy fallacy.

      • Theo! Thank you! :) Lol, “pixie.”

        Mister Theo. I may be short on accomplishments…
        But, I have the heart of a LION! …. grr

        And the brains of… er……………. of a …… ah….. uh… Hm. I’ll get back to you on that (I hope).


      • Chris

        Opinion & free advice from a retired CFO regarding your subsidy bleatings:

        Opinion: Bovine excrement.

        Free Advice: If your mom has a basement, go back to it right now and stay there until you understand the difference between a “subsidy” and depreciation on a business capital investment.

      • They are also probably including controversial assessments of fossil fuels’ negative externalities (e.g., shortening lifespans due to mercury, etc.).

      • What fossil fuel subsidies ??

        The US Treasury is the single largest profit taker from the fossil fuel industries out winning the shareholders who put their stake in funding those industries.

        The lefty loonies like to treat capital depreciation as a “subsidy” as if the Treasury is paying people to not write off the expenses of operating their business just as every mum and pop store does.

        Oil and gas companies would be happy as a clam to stop capitalizing their assets, but simply writing off their business expenses as they are incurred.

        The notion that fossil fuels are subsidized is just plain silly; wel,l and ignorant as all get out as well.


      • You tell him Janice.

        Ignorance is not a disease; we are all born with it.

        But there is NO cure for stupid.

        And all businesses deduct their operational expenses from their gross, before figuring if they have a profit.

        Even in tax heavy USA, we don’t tax people on their gross receipts just on the 4% or so average profit they may make (if any).

        Socialists like Chris, believe that the government should tell people what fraction of their gross earnings they should be allowed to keep.

        You won’t find a lot of people like the Chris’s of this world, who are actually running a successful personal business.


      • Yes, they sell it, subsidized and then it make electricity more expensiver for everyone else. That is, if on a home and they grant a Feed In Tarrif, or worse, a mandated solar farm and the grid must pay more for the electricity. Bad for everyone, bad for the stability of the grid, and good for nothing.

      • Thank you, George. And thanks … for taking the time to write that…

        After being accused by a regular WUWTer today of lying on another thread (a first for me! — guess that means I finally made it at WUWT, lol), it was so good to get a *ping* of support here from a “friend.”

        I hope all is well with you, down in California… bummer about all that rain.

        After dealing with all the tr0ll junk on this thread…

        Here’s a little song… just in case you see this (hoping it will make you smile):

        (youtube — “Raindrops Keep Fallin’ on My Head” — B. J. Thomas)

        Just remember, rain happens, but,

        It won’t be long till happiness steps up to greet {you}…


      • Chris
        Do your calculations based on BTU/$ and you will find that renewables are subsidized at over twenty times the rate of fossil based fuels.

        There are more if your interested. Bottom line is that renewables, solar/wind, exist because of government subsidies. If you take those subsidies away, solar and wind are gone.

      • @ Janice Moore: When you refute the evidence asserted by the IEA, only then will you have said something useful, here.

      • george e. smith said: “Socialists like Chris, believe that the government should tell people what fraction of their gross earnings they should be allowed to keep.”

        Are you always this inaccurate, george? I’m just against excessive subsidies for technologies that have been around for 100 years. I guess you are in favor of them.

      • Javert said: “Chris

        Opinion & free advice from a retired CFO regarding your subsidy bleatings:

        Opinion: Bovine excrement.

        Free Advice: If your mom has a basement, go back to it right now and stay there until you understand the difference between a “subsidy” and depreciation on a business capital investment”

        What a colossally dull retort. Trotting out 20 year old jokes about mom’s basements is the best you can do? .

      • Ok Chris, how much subsidies do you want? I’ll give, from my own pocket, as much as you want. Only it will be the kind of subsidies that oil gets, by IEA calculations.
        So, then again, just give me a figure. I’ll give you that. I am serious. Real money here. For you are any charitable of your choice if you have rather.
        If you really believe in these oil subsidies, just state a figure.. We’ll find a way to get in touch to make it real.

        Disclaimer/warming: I insist that will according to IEA be way to count subsidies.
        when the Saoud king ask 1$ from his fellow citizen for some oil he sales 10$ abroad, IAE counts 9$ subsidy
        when a country tax only 5% on oil for home heating, while taxing 50% for the very same oil used to fuel a car, IEA couts a 45% subsidy for oil
        Spoiler alert: the more I subsidize you, the more money YOU’ll have to GIVE ME. Yes, IEA count as a subsidy from me to you the fact that YOU give money to me, provided you give me less than some other people for the same: the difference is a “subsidy” i give.
        Still want those subsidies ? Still find them a rant matter?

    • Chris
      February 20, 2017 at 8:50 am

      It is not the subsidy amount that counts in finding the true cost. It is the subsidy per KWH. And solar/wind is at least 10X the subsidy (per KWH) of petroleum sources.

  2. Paradoxically, short selling also provides a certain amount of a floor under a stock. The short seller must cover at some point after the stock drops (at least, they HOPE after the stock drops). This is the inverse of a short squeeze, where a short covers while the stock is going up, further increasing the price gains. In any event, yeah, short the hell out of solar. Hopefully they all go bankrupt and stop sucking up my tax dollars.

  3. “A solar skeptic since his tenure at Lehman Brothers a decade ago,”

    Ah yes, Lehman Brothers, they’re the ones who knew what the climate was going to do in one hundred years time, but couldn’t see their own demise a couple of years ahead!

  4. “Short selling clears the fog of spin, revealing the ugly reality beneath the glossy brochures and rosy, overhyped forecasts.”

    So true. John Templeton pursued a short-selling strategy throughout the tech boom. His strategy was to short every single IPO effective the day after the promoter’s lockup expired without regard to what or who was being promoted. In other words, every single promoter he assumed would be dumping the stock the first day he could. Templeton made huge amounts this way.

    There are obvious parallels with AGW and renewables. Sir John ignored the narrative and looked to the base human motivations. He was proven right. The fact that the solar industry ostracizes this analyst only strengthens the case for short-selling. I hope (know) he will make a fortune.

  5. Industrialized economies Require cheap, power on demand, 24/7, and lots of it. Solar is only good for third-world, starvation pits, with an economy based on manual labor and water buffalo (or the equivalent).

  6. People who did not learn the lesson taught by Jimmy Carter are doomed to
    repeat it. Gordon Johnson obviously did.

  7. I prefer buying puts. That puts (pun intended) a floor on how much you lose if price goes up. Selling naked shorts means (theoretically) there is no limit to how much you can lose be cause there is no theoretical upper price limit. Naked means you don’t own the stock position you’ve shorted.

    • You do not own the stock you have shorted, you borrowed the stock from a second party and sold it (at what you hope is an overvalued price) to a third party. You are expected to buy the stock back (hopefully at a much lower price) to return it to whomever you borrowed it from (generally, a brokerage house).

      Naked means you never borrowed & sold the stock you are shorting (this is illegal).

      • slight edit:

        Naked means you never borrowed the stock you are short-selling (i.e. you sold something that does not affirmatively exist, and this is illegal) .

  8. All investing is risky. You can lose your shirt on a stock that you buy and loses all of it’s value as well.
    The only difference between short selling and regular investing is what direction the stock has to move in order for you to lose your shirt.
    Is buying on the margin that can bankrupt you quickly.

      • The only way to be unlimited is for infinite stock price to be an option. Otherwise, there is a limit. IE, whatever the maximum stock price is.

      • The point is, when you short, you can lose multiples of your original investment. You can end up in a debt position, with negative net worth.
        You are not exposed to this risk when you buy stock or options. The lowest you can go is zero.

      • lokenbr, I agree. However I was responding to the irresponsible claim that losses were unlimited. Such scare tactics are not justified.

      • MarkW

        Since you’re such a stickler on “infinite” or “unlimited” losses on short sales (you say it’s not rational), then we need to point out that a stock going to zero is also not rational.

        We’re quibbling over words to obscure your incomplete knowledge of the difference between regular and short sales. Silly.

      • Maybe the correct word for maximum losses on short sales is that they are undefined. There is no way to cap to risk at any defined level. Let’s say you shorted Amazon in 1997 for instance – stubbornly holding on until today – you’d have lost 100s of times the value of your original short. What is the limit?

        And for what it is worth, yes companies go bankrupt, stocks can and do go to zero all the time.

      • Stocks do indeed go to zero – with listed securities on a credible exchange (aka: not penny stocks), this generally not happen frequently, quickly or without court (bankruptcy) proceedings.

    • MarkW


      The most you can lose if you own the stock is 100% of your investment.

      The most you can lose if you short the stock is infinite.

      • MarkW

        My (well, actually mathematic’s) definition of infinity: a number greater than any assignable quantity or countable number. The number of integers (1,2,3,4,5…) is infinite, – there is no such thing as the highest possible integer.

        The theoretical loss of a short sale is infinite, there is no such thing as the highest possible short sale loss (I would agree there is a difference between maximum theoretical and realistic loss).

        These are not scare tactics (as you state), these are realities that investors must understand. By SEC regulation, brokerage houses will not let uneducated investors trade in a margin account (required for legal short sales) because of the risk (especially with short sales).

  9. Short selling is heavily maligned in the popular press, where reporters often characterise it as a dangerous game played by wreckers.

    It is dangerous for the short seller and obviously the short seller wants to see the stock price wrecked.

      • If predicting that a trampoline is going to fail always involved an elephant jumping on the trampoline at the same time, then predicting trampoline failure would be considered a cause thereof. You can’t sell short without jumping on a stock, and if you’re a big enough short-seller, you are the elephant.

      • jorgekafkazar & MarkW

        Undoubtedly numbers of unsophisticated investors agree with you. That still doesn’t make the practice work.

        Don’t believe me? The CEO of Twitter just made a big TWTR buy (I think $7M) – you guys ought to buy some of that (ps: hurry up – the stock has since gone down).

        Advice from an old retired CFO: the higher the portion of unknowledgeable fools in your market place, the better your strategy works (i.e.: penny stocks vs NYSE).

      • Javert: What you’re telling me is that the CEO of Twitter, with big TWTR buy, crawled underneath the trampoline and started butting it with his head. I see no reason whatsoever to take that as a buy signal. The topic here is selling short.

    • Juice

      Actually, the short seller wants to see the stock accurately reflect the value of the company (i.e.: NPV of future profits).

      it’s a loser’s game to just try to talk down an otherwise solid stock. Inevitably, some short sellers (Bill Ackerman at Herbalife is an example) do indeed try to destroy a stock thru sheer publicity (as opposed to economic fundamentals). For his efforts to date, Ackerman has been sitting on $1B+ losses for about two years.

  10. I posted this about 2 years ago (re: where real money will be headed), but, I think it’s apropos here….

    October 18, 1987


    Investors should love Mr. Johnson and his kind. They are what make free markets work! They are what will prevent another October 19th.

    Price must be accurate information.

    Johnson is making that happen.

  11. I was just looking at solar stocks and a lot of them have a very high percentage of short interest as a percentage of shares outstanding. This just means that a lot of investors are betting that these stocks will fall, and it seems that ones with the most short interest are already hovering around 52 week lows. To me it would seem that these particular company’s stock prices are very unlikely to rise but more likely to go down fast, hence the interest in shorting them.

  12. Short selling public companies who have obsolete or unrealistic business models is how money gets moved to better uses. It is always possible that the folks selling short will oversell and have to cover their positions if the market moves against them ever so little–this will cause a short term rise which should not be confused with having a good business model.

  13. Best investment advice I ever got:

    1) Do a fair amount of homework on the board and management.
    2) Look at who’s long and who’s short, that tells you most of what you need to know.

    Both pieces of advice from a Texas oilman, engineer, and avid conservationist.

  14. Ah, the 87 crash. I made a boatload of money on that one buying when others panicked. But if it happened today, would I buy solar stocks?

    Not on your life.

  15. I started to read the linked source article, but stopped when the author (of the Bloomberg article) threw out the silly statement of Trump claiming climate change is a hoax invented by the Chinese (with no /sarc qualification). Sorry, but don’t trust whatever else the author has written. Might be (and probably is) some good stuff, but I have no idea how to tell the difference. My first key to finding decent information starts with seeing some semblance of credibility. If the author throws in some obviously out of context, or just plain wrong or silly statement, I usually give it up at that point. There are lots of sources of information. Some pretty good (WUWT is usually my first stop). Most are complete and utter garbage. Even a little background research makes telling the difference fairly straightforward (if you are a generalist…:)).

    • This is not so far-fetched, this opinion of Trump. At the very least, Rotchina, with its rigorous dictation, is the model among the climate armists, which offers the best chances of enforcing the AGW agenda and the Socialist Unity of the World. All other socialist models have failed. But, people do not fear, even socialism in China will fail. Marx and Engels style is this hardly any more. What has remained is a brutal dictatorship. Which differs only in sound from that in North Korea. But the dissident camps and prisons are full of political prisoners in China and North Korea.

      • Socialism has already failed in China, that’s why the leaders there have been allowing more and more capitalism in the country.
        It’s still a vicious dictatorship, but it’s less and less a vicious socialist dictatorship.

      • “…I must say that I think we owe [Stalin] a debt of gratitude! For the wonderful example he has given the whole world of the axiomatic truth that Communism always leads to dictatorship.” –CG Jung Speaking, pg 131

  16. Renewables are like the disastrous US/EU housing bubble. When 90 percent of the players especially politicians line up, a massive bubble inflates. This is always true when the business model doesn’t make sense.

    “Home ownership makes for better citizens”

    “Renewable energy is saving the planet from climate change”

    Neither are based on economics

    • I would not compare that. The longing of people to compare their own house with the AGW agenda testifies to bad style. When loans were granted to persons who were unable to pay them over the entire length of the loan, this is at most a sign of the fact that something went wrong in the US economy. This was certainly not due to the house buyers, rather to the rising unemployment at that time. While the government’s over-funding of unprofitable renewable energies is quite different, a model for maintaining a doctrine against all the economic reasons that contradict it. This also led to the economic collapse of the Eastern bloc. While one’s own house is more likely to prevent poverty in old age and increase the wealth of private individuals. If you can pay off loans. And this is not in the power of the individual, but also in economic policy.

      • Hans-George

        Good points. We know what went wrong in the US economy. 911 caused the Fed to reverse interest rate policy drastically. An existing housing bubble was allowed to grow larger to sustain the economy. Subprime encouraged by Fannie and Freddie Mac became a larger share of the bubble as qualified buyers became scarce. Predictable defaults collapsed the over leveraged financial market.

        Renewables do not work outside legal mandates, environmental regulations, and tax subsidies. The housing bubble would not have ocvured without the same inducements. Buyers decisions are based on conditions created by others.

  17. This is a twist to the sell, sell, sell: solar energy, carbon credits, tripling the cost of electricity, banning commercial air travel, and wind farm shares premise.

    The entire CAGW premise is based on the warming that did occur and spinning away the 18 year pause with no warming as a pain in the butt to their zombie theory. They are assuming planetary cooling at this time is impossible, if there is no major change such a super volcano eruption.

    Planetary temperature starts to drop, there are weird persistent weather patterns. (There has been no cooling but there is the start of a change in weather patterns.)

    Cult of CAGW try to spin away the observations as climate change. Press picks up on the unexplained cooling planet problem which coincides with the weird solar ‘minimum’. The two stores (weird solar change and unexplained planetary cooling) move to the top of discussions.

    Observations continue to support the assertion that the solar cycle has been interrupted which is unbelievably different than a slowdown in the solar cycle.

    The cooling will start as soon as the solar wind bursts from coronal holes abate (GCR is already the highest ever measured at this time in the cycle, the solar coronal holes are starting to move to high latitude regions of the sun where the wind bursts that they produce no longer affect the earth). The heating estimate from cloud changes due to solar wind bursts based on measurements of the change in planetary albedo is in the order of 7 watts/m^2 as compared to 3.5 watts/m^2 for a doubling of atmospheric CO2.

    As to a prediction of what will happen, look at the Little Ice Age as an imperfect but reasonable analogue. The most radical in the favour of CAGW premise is half of the warming in the last 150 years is due to the rise in CO2. My estimate is more than 90% of the warming in the last 150 years is due to solar cycle changes.

    Curiously, the longer the delay in the onset of cooling, the greater the expected cooling and speed of cooling.

    • William –

      “The cooling will start as soon as the solar wind bursts from coronal holes abate (GCR is already the highest ever measured at this time in the cycle, the solar coronal holes are starting to move to high latitude regions of the sun where the wind bursts that they produce no longer affect the earth).”

      It is interesting that there has not been talk about this aspect to the space weather. I’ve recently been collecting data about the affects of the solar wind on our atmosphere. I have observed changes in the barometric pressure during the time that one becomes geo-effective. Just like we have one staring at us right now…

      And about five days later, we get another blast from the same hole. Sometimes it is both aspects from two diffferent holes that arrive at earth at the same time.

    • Believe you’re on to something.

      However, experts agree that the Government SHOULD NOT Stop Dumping Money into the Alternate Energy Money Hole (two minute vid explains why)

      Just because electrics have disappeared into the money hole with trunkfuls of government purchase orders is no sign they won’t work. Just, who wants to fight a desert war with electric tanks, planes? Robots maybe? I digress..

      AE companies aren’t 100% failures, though. A high percentage of them are successful cons, scams, shell games, etc

      Production costs = product’s price is an extremely complex formula. DOE is massaging the concept ref solar/wind And massaging the concept . . .

      China sells solar panels to the “informed and environmentally sensitive”. China produces its manufacturing energy with coal. Sly devils stole America’s secret. There’s no known cheaper fuel at present with which to mass produce electricity. Another secret: China and the U.S. have an unlimited supply of this stuff under their dirt. And there’s scrubber technology in-place to reduce coal plant pollution. But the EPA stumbles on along its asphalted political road trying to shut coal plants down because . . .

      A market mores: He who gets there first with the best and cheapest wins until someone comes up with a better way. When solar, wind, other AE arrive at this point without subsidies, they’re in. And there are other better alternatives for which The Entrenched have issued sleeping masks to the government. Bird fryers/blenders exist only on the money hole’s rim (nee, robbers’ roost) with tax-dollars.

      So why the fevered search for the sun/wind grail? Can you say pork barrel? Political kickbacks? Money trough? Fraud? Theft?

      Spain went all in with a mega solar project. It disappeared into their money hole. Solar doesn’t seem to work in the dark or rain. Coal plants do.

      Germans still working out The Better Way. They’ve mostly shut down (1) their uranium-powered steam generators capable of rendering a country (or the planet) fallow if the wrong pipe bursts or valve fails or faults they’re built on shakes them to pieces, and (2) concreted over much of their solar/wind money pits. They’re good engineers. They’re looking at still other alternatives. Stay tuned. Meanwhile an all sp/wt Australian grid experiment leaves huge area with no operating energy, while Britain loses some withot energy for heat for the same reason.

      For a look behind the curtain at the US’s Department of Energy’s Disastrous Management of its $16 billion Loan Guarantee Programs (chunks of which are for AE projects), see Stimulating Green Energy Dreams (2013 numbers) below;…

  18. get it wrong and you can lose your shirt. Your money, your risk, your responsibility

    Ackman lost a lot of money over the last two years shorting Herbalife. He was probably right about the company but it managed to stay afloat.

    • Well Ackerman got the US government to audit the firm for predatory practices (Ponzi scheme)…and lost (aka: he was not right about the Herbalife). Turns out, lots of actual people like those shakes (or whatever the heck it is they are selling).

      Ackerman may not like their shakes, but, at this point, enough people do to make it a going concern.

  19. Short selling is illegal IF the seller has inside information. As he has not been charged (or appears to have access to) with having insider information, then the short sellers (or even the go longs in other areas) have to evaluate the company from publicly available information. Soros short sells whole countries! And has never been convicted.

    It is a guessing game for most. However with the right amount of research, it can be very profitable.

    • philjourdan

      Your first sentence is accurate but incomplete. A more complete statement is: Buying or selling (short or otherwise) is illegal IF the seller has inside information.

  20. What no one has gotten into in this thread on “subsidies” is that most of the government support for “renewable energy” is in mandated purchase rules, not in direct payments to the producers, which is sometimes used as the definition of “subsidy”.
    Having a priority in the market, at a mandated premium price, is quite the advantage for the politically correct electricity producers, and definitely not a free market price structure. Much of the problem with being a conventional power producer in a grid with extensive “renewables” is not being compensated for acting as the backup for the intermittent and nondispatchable wind and solar.

    • Tom Halla

      There certainly are favorable “renewable energy” purchase rules (I bought $36,000 of solar voltaic for my home; net cost after utility rebates & tax incentives = $4,000).

      I’m not a “solar” expert, but there also seems to be an awful lot of highly favorable financing ($535M loan to Solyndra comes to mind). It’s unclear which is more substantial, but both types of subsidy (start-up capital + sales subsidy) are probably required for these zombie-at-birth firms to even pretend to exist.

  21. The real investment is in solar energy at the individual person level.The US is filled to overflowing levels in remote human habitats. Prices are still high though. Might that be related to the simple fact that subsidies are mucking with market driven pricing? If watermelons really wanted to understand market economics and wide spread use of solar/wind energy, they would march to end subsidies. But that will never happen. They want Shangri La delivered on a free silver platter. That will never happen because they think Shangri La can only exist if the collective “we” force it to happen. That you search for it means you will never find it. Tibetans, very wise.

  22. I’m a small time investor, just trying to keep some safe investments above water. Short selling requires steelier nerves than I possess. ;-) That said, it’s always instructive to see how the target company reacts. If the CEO expresses outrage at the short seller’s analysis, threatens to sue, etc., than you know the sort seller is on the right track.

  23. How is selling short during a bear market any worse (or better for that matter) than the speculative buying in a bull market that preceded it? Buying with inside info is just as illegal as selling with inside info. No such thing as safe investments, only lower risk. How about hedging your long positions during a bear market?

    • When you short you do not own the stock but borrow it from the broker to sell at a fixed price hoping later to repay the broker with those same stocks repurchased when the price is much lower thus making a profit on the difference. But remember, in order to sell someone else must be willing to buy and in order to buy someone else must be willing to sell.

      • Also realize as the “short sale” becomes increasingly obvious, the fees to borrow the stock for a short sale rise dramatically.

    • If your looking for a “safe” investment, the stock market is not for you.

      Even if you can tolerate risk (reasonably correlated with higher returns), if you cannot read financial statements, most individual stocks are not for you.

      Seriously think about index mutual funds.

      • An excellent book on financial statements and how to read them for profit is :
        “Warren Buffet and the Interpretations of Financial Statements” written by Mary Buffett and David Clark, Buffet’s daughter and son in law. It clearly explains how Buffet would interpret the financial statements looking for companies with “a durable competitive advantage”. It made him very wealthy.

    • Short selling only works if you can sucker someone into buying at a price that seems like a bargain today, tomorrow. So short selling in a bear market is hard to do. As is going long in a bull market (buying at a price that looks good today, but is a steal tomorrow).

      • As they say. timing is everything. Technical traders believe they can spot upcoming pivot points in a stock price and plan their entry or exit of that stock accordingly. As they also say, fear and greed drive the markets. There will always be those who are more afraid than others and those who are more greedy than others. So there is always a spread between those and the trick is to be able to take advantage of that. Keeping in mind of course that sometimes you win, and sometimes you lose. Managing your losses is of upmost important to being successful in stock trading.

      • philjourdan

        Different investors frequently have different opinions of the same investment opportunity (your guess of what Apple’s stock will be next year is probably different than mine); this does not mean one party has to “sucker” the other party (although this can happen, especially with unsophisticated investors). There is money to be made on these differences of opinions.

        It is true that short sellers are not the most “respected” of investors. If this is a serious concern, you could do much the same thing with “put” options or derivatives.

  24. Hi Eric
    Thanks for posting the story on shorting CAGW stocks.
    I have a degree in geophysics and have been in the financial markets for a long time.
    My thesis has been that on this popular uprising the public will see through the two main statist boasts.
    That the economy can be “managed”.
    And that the climate can be “managed”.
    You might Google

  25. good article, it is always worth listening to someone with skin in the game. if climate scientists had the same level of accountability i doubt cagw message would be the same as it is now.

  26. The top 2 corporate income tax payers in the US are Exxon and Chevron. The concept that the fossil fuel industry is getting subsidies is laughable.

    • Just because they are paying taxes doesn’t mean they also aren’t getting subsidies.

      Someone above said that fossil fuels get 4 times the subsidies of alternatives. Assuming that is true, consider that they produce …guessing… 35 times more energy than wind and solar.

      So, no matter how you slice it, alternatives are bloated with subsidies.

      • The so called subsidies are mostly two things.
        In the US, they are standard business deductions.
        Outside the US, they are from governments selling gasoline to the masses at below market prices.
        Mexico is big on this.

      • Barbara

        When Chris (upthread) claimed fossil fuels get 4X the subsidy of renewables, he (probably knowingly & willingly) conflates depreciation/amortization of business capital investments with government subsidy.

        Government giving a business a tax deduction for shareholder (not taxpayer) money they re-invest in the business is not definitely the same as giving that same business a subsidy e.g.: (lower-than-market-cost loan or tax rebates to customers who pay a high price for your product).

  27. Eric
    “The article details some cases when Johnson got it wrong. The kind of trading activity Johnson facilitates is potentially high return, but in my opinion it is also high risk – get it wrong and you can lose your shirt. Your money, your risk, your responsibility.”
    I may be nitpicking, but I find this statement to be somewhat misleading. Trading equities involves risk, and for that risk the rewards can be “rewarding”. There is nothing the least bit immoral or risky about a short sale. If I think a stock will go down and you think it will go up, you buy. Because we have opposite viewpoints, I borrow the stock you just bought and sell it. At some point I must replace the stock I borrowed. If I was right, I win. If you were right, I lose. Assuming neither of us have insider knowledge, the probability it will go one way rather than the other is exactly fifty/fifty. My risk is not more or less than yours.

    • Essentially correct – the risk premium on a short sale is exactly the same as for a long position. What the post author probably means is that losses on a short position are potentially limitless, unlike a long position where the loss cannot exceed the investment.

      • The one thing that people tend to forget to mention, that same rule, but in reverse, applies to income.

        In case of short sales, you loss is limitless but your income is limited to amount invested.
        In case of long, your loss is limited to amount invested, your income is limitless.

  28. I have no criticism for anyone making a dollar of this global warming scam , matter of fact if the Labor party get voted back in for a second term in Victoriastan (Australian state ) I will seriously consider investing in their windfarms they want built .
    Because I’m green ? Hell no , because I’ll be rich if I play the game right ? Hell yes .

  29. Good on him. Stick to his guns and he will make a fortune. Big solar will fail because it is a fancy high tech version of The Music Man. Someone should make money off the popping of that particular bit of climate parasitism.

  30. Well you have to admit the watermelons have hit on a very cunning plan. With no lights on we’ll all appear equal and at one with the environment. Utopia at last.

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