Renewables is the latest flavor of the season since past few months. As you said, valuations have gone through the roof and the narratives being built are as if this is a very high moat business. Personally I feel it is not so.
I think all this started in the backdrop of the Ukraine war. Because of the war energy costs across the Western economies started shooting trough the roof. And that brought about the fancy for renewable theme.
Every story has an initial phase of rejection/resistance, then it finds acceptance and finally ends in froth. My gut feel is that in this space we are well beyond the acceptance phase and heading towards (or are actually in ) frothy phase.
Once the cookie crumbles, we have no idea how much things can go south.
The one philosophy that has worked very well for me over the past few years is finding multi year breakouts and if these are in companies with cheap valuations ( on conventional parameters), then there can be very good upsides with limited risks. Financials ( dont ask me to name them ) in some pockets offer such opportunities.
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