Be greedy when others are fearful, and vice-versaWhen it was announced that Suntech, the world's largest solar panel maker, was going into bankruptcy, I tried to explain why I thought that it was possible for an industry to grow very rapidly and be world-changing while individual companies within that industry have a really hard time making any money (at least until the sector matures and there's consolidation). I even quoted a speech that Warren Buffett gave about the dot-com bubble to support that point.
Just a rumor so far...Well, if there's one way to describe Buffett, it's "bargain hunter". When people are running away from something, Buffett usually goes in the opposite direction and takes a look to see if there isn't a quality undervalued asset that he could buy.
There's currently a rumor going around that Buffett might be interested in buying Suntech out of bankruptcy, and while this is nothing official, it's enough to have made the solar panel maker's stock go up almost 50% (as of now) over the past 2 days. If Buffett was to buy Suntech (nothing's done yet), it would be a great stamp of approval for the industry; We already knew that Buffett thought wind and solar were attractive investments as the owner of many wind and solar farms (see below), but this would also say that the great investor thinks the makers of solar panels will also bounce back to profitability over time and the industry won't stay as cutthroat forever.
Such an acquisition would make Berkshire Hathaway the world's biggest producer of solar panels overnight.
Buffett is already a huge investor in renewable energy via his utility, MidAmerican, which is a subsidiary of Berkshire Hathaway. Here are some posts that we wrote about it:
- Warren Buffett Buys World's Largest Solar Project from SunPower for $2.5 Billion
- Warren Buffett Buys 49% Stake in Arizona's 290-Megawatt 'Agua Caliente' Solar Project
- Warren Buffett Updates Shareholders on Wind and Solar Power Investments
- Warren Buffett's MidAmerican Orders 258 Wind Turbines for Iowa Wind Farm
- Warren Buffett <3 Wind Power (His Utility Company is #1 in USA)
- Warren Buffett's Utility to Buy Massive Californian Solar Farm (550MW) from First Solar