It’s like year 2000 all over again! Have you seen p/e ratios like this recently?

FIRST SOLAR, INC.(NasdaqGS: FSLR)
Last Trade: $278.57
Market Cap: 22.20B (!)
Revenue: $600M (!)
P/E: 110.81
EPS: $2.51 (!)

FSLR fans say that it’s a revolutionary new industry, and if you were so cautious with P/E ratios you’d also miss on Google’s ride up.

The thing is, Google came up on the second Internet wave, when a lot of dot com pitfalls were clear. Solar power generation is still an uncharted territory. The risks are numerous:

• FSLR solar panels are made with the rarest stable element on earth – tellurium
• tellurium is not only rare, it’s toxic; at a later date it may be found that any environmental benefit gained doesn’t outweight its risk
• solar industry relies on government subsidies which can dry up any time; case in point – just this week, German government proposed to cut their subsidies by 30%

And seriously, who in their right mind would pay up to $300 for a stock with that kind of earnings? Any future growth potential is built-in a hundred times over. Speculator’s paradise, until it isn’t.