 Good day, fellow investors! For this week, long-term stock market news, I decided to discuss a little bit the solar environment, because there is so much to learn in relation to what happened the last few weeks. I have been analyzing the solar environment for the past three weeks for my research platform and what is very, very interesting, that in the last three weeks, the solar environment went from being the darling of the market to being the most hated sector in the market. And therefore, there is so much to learn about cyclicality, how cyclicality affects the stock market, how news affects stock prices and how then different news affects the same stock prices and how you should behave, how you should take action when trying to invest in such sectors. Peter Lynch was the king of investing in cyclical sectors and really buying when there's blood on the streets and selling when everybody was enthusiastic, like they were two weeks, three weeks ago, a month ago. So let's dig into what happened, what are the reasons behind what's going on, how analysts swiftly change from recommending and buying to selling and then close how one should behave in relation to that. So just the stock here, first solar, in the last three months the change has been 27% and most of the decline has happened in the last two weeks. So what it is amazing how sentiment quickly changes, up till May, beginning of May, everything was very, very good, estimates were very, very positive and some were even seeing 140 as a stock price for first solar. But now they are seeing 50 and even lower stock prices. So what happened, up till mid May as I said everything looked perfect, California made it mandatory for new homes to have solar panels from 2020, first solar was announcing production increases alongside new production plants and on May 10, 2018, a little bit more than a month ago, JP Morgan even upgraded first solar by increasing its price target from 75 to 85 based on the market leading Series 6 product. I'm always a little bit wary of investing in such bullish trends, especially at a late stage of bullish trend. First solar stock is up 200% over the last few years. So you can invest at a high point or at a low point. I prefer to invest at low point when there is blood on the streets, but I have to analyze the sector to see when I should invest. Similarly, and that's the long part of the story, solar reg technologies is also down what, 40% since the peak in May, but it's still up 25% for the last six months. So that's what you have to see where the stock price is in relation to the intrinsic value in relation to the long-term trend. So investors got carried away by the flow of good news and strong earnings, strong guidance, strong expectations, and they forgot that the solar industry is extremely cyclical where supply gaps can quickly turn into supply gluts, especially if there is a change in the political stance towards it and subsidies. And that's exactly what happened. The first big hit was two weeks ago, 4th of June, when China announced the suspension of solar quotas and subsidies cuts in order to put the exploding industry under control. Investors on electricity generated from clean energy has been lowered by 0.051 per kilowatt hour or 6.7 to 9% depending on the region. This is what triggered the spiral of downgrades for solar stocks, Bank of America Merrill Lynch lowered its first solar price target from 85 to 63, unexpected margin contraction where the halt in Chinese installation will potentially lead to a global oversupply of panels and consequently lower prices. It is very funny that the same bank upgraded the stock just two months ago, so April 2018 upgrade from 75 to 83. Further JMP downgraded from 87 that was their target to 46, Goldman lowered its price target from 75 to 48 based on 40% lower volume expectations in China. And this is also what analysts do. They take the news what has happened, implement into their models and then change the prices. If you want to be a successful investor, you have to think what can happen, you have to think ahead of when it happens and then buy when you have a margin of safety, intrinsic value and when the stock prices are below the long-term trend. The long-term trend with solar will probably evolve, technologies will develop, battery storage will become cheaper and solar will be a big part of the way we consume energy. But it will be ups and downs, ups and downs, ups and downs and you have to buy on the downs and sell on the ups. Not do the opposite like many do because that's inherent to our nature to invest only when we see a stock chart going up and then we have confirmation for the past. Research allows you to have confirmation, not from the past, but from what can happen in the future. I also analyzed first solar, you can read that in the link in the description below, on my research platform is open for everybody. And I even overestimated earnings, but I included cyclicality in those earnings. So you see I went up and down, $7 was the expected earnings for first solar that I have to now adjust on the lower side, but my valuation included cyclicality over the long-term and therefore was much lower than the 75-80 target prices than they had. So I was below 50 on my valuation. So now that first solar is below 50, I have to retake another look and then see where is my new intrinsic value and wait for opportunities. It's not yet blood on the street, it's just cloudy. So discussing cyclicality, what will happen? You might think, okay, first solar has no relation to China. Well, now all the Chinese producers cannot sell their products to new projects in China because there won't be any as there are no quotas. There will be. Goldman expects lower, 40% lower volumes in China and China was 50% of solar PV installation in 2017. So that's 25% lower, 20-25% lower of global PV installations, which means that there will be 20-25% and they were expecting all growth, more solar panels on much less demand, which means prices get hammered down. That also means margins get also hammered down and a lot of the earnings we have been seeing will be turned into negative earnings because everybody will just try to get rid of inventory, especially the debt-pressured Chinese stocks. So there will be a flood of cheap solar panels on the market and that will compress margins and recharge the same cyclicality that we have been seeing in that stock market for the past 10 years, ups and downs, ups and downs. So I'll continue to keep an eye on solar stocks, keep the intrinsic model updated, keep the value, look at the long-term trend, which I'm a strong believer because I see the development, I see the cost going down, I see the practicality, I see the storage coming up, really I think there will be more booms and busts and I think that we can smartly find opportunities, perhaps not now, perhaps in the next six months, two years to really buy that with a margin of safety. So thank you for watching, if you are interested in my in-depth analysis on the sector, on a few stocks, there is even a buy that I have bought for my portfolio in the solar industry, check my research platform. Looking forward to your comments and I'll see you in the next video.