Polaris solar PV net news: sunk costs, as they threw down the memories of the past, or sweet, or bitter, but are more or less affected in today’s decision, it is difficult to really live in the moment, it is hard to parachute
“Seeing him Lou Zhu, seeing his dinner guests, seeing him collapse! ”
PV manufacturing in recent years of ups and downs, like the peach blossom fan, this simple phrase of deduction in General, yesterday is still under work fast, and suddenly, today has been waking up in the market turnaround. Many investors follow the PV manufacturing industry, especially those after the 2010 business enterprise, and are almost caught in an awkward position.
Although these inputs from entering after May is not too small, but compared with market-leading businesses, regardless of size, or brand has a large gap, as market competition becomes more shape, its Outlook is more uncertain. Once the market downward, these businesses could easily tap orders often have to stop production and a shutdown state.
Problem is these enterprises, how to activate has invested assets and capacity? Or, is the continued to increase investment, through hard efforts in quality, channels and brands to overtake mainstream companies grab market share? Or exit manufacturing other?
Increase investment in addition to face increasingly fierce competition and thinner profit margins, also had to deal with the increasingly severe debts woes in the industry. Restructuring, but could not bear to have losses of investment, also fears another nadir has previously giving a feast of riches.
These are not just into confusion.
Actually, market Shang of some mainstream enterprise also also faced with similar of dilemma, even more distress–in operating profit long-term for negative of situation Xia, is based on has some brand, and channel, and capacity scale or market share and entrepreneurs of personal fame, causes, and teether insisted with, more is who zaguomaitie continues to increased inputs, to through “who more thanks to up” of non-rational way left in market Shang.
In fact, this is a typical kind of obsessed mentality misunderstanding of sunk costs.
Sunk-cost trap is that the larger the upfront investment, investors are more reluctant to give up, even if the input cannot be valued.
It is in thinking of this only on input costs, regardless of the enterprise, or some local governments are putting more energy into the inventory of assets and purchased at additional inputs, as well as some “rescue” starting point of policy is also based on this, and totally ignored the direction of sustainable development are fundamental to business and industrial development.
So, in addition to deeper outer also ignored another possibility is greater–opportunity costs.
There is no doubt that prospects of photovoltaic industry is becoming more and more clear, and broad space of development. But the principal contradiction in the industry at this stage, but it is severe overcapacity. Even more important is that development opportunities is tilting toward the lower reaches, this is the best window into the downstream.
This is actually greater missed can not afford the cost.
It is said that a good investor, should have no memory.
Sunk cost, as they threw down the memories of the past, or sweet, or bitter, but are more or less affected in today’s decision, it is difficult to really live in the moment, to a parachute.
Photovoltaic industry development to date, is emerging more and more rich business opportunities and innovation needs, if an investor wants to make a difference, that decisively lost the burden of history and leave those sunk costs like chicken, which focuses on innovation and new opportunities will it be possible to not miss out on a great source of energy reform event.
Original title: photovoltaic investments: sunk costs is a pit