"Fed" up?

It has been a while since I wrote my last blog on Tesla. Since then Tesla's stock price has increased by 30% (from 90 to 120). Looks like many folks are believing Tesla story and possibly its similarity with Apple when ipod was introduced. But most important story for last few weeks have been "QE3 tapering" by fed. Just the talk of tapering has caused havoc in bond/treasury markets with 10-year treasury yield jumping from 1.6% to 2.7%. This is huge in terms of move (equivalent DOW move would have been anywhere between 3000 to 4000 points down). Markets always position for what may happen 6 months in advance. However at same time it overshoots on either direction. IMO, markets have started overshooting in terms of punishing some REITs and commodities. So that may create good value to take some positions in stocks like AGNC ($20), CYS ($8), NLY ($11). These are all high-yielding REIT and very sensitive to interest rate changes and are down by 30-40% this year just due to possibility of fed tapering and interest rate changes. However since this is still few months out, these stocks could prove good returns and yields in short term.
Another sector I like is Solar. I recommended this sector in my previous blog in Feb 2013. Since then many of these stocks like (FSLR, SPWR and SUNE) are on fire. However given the recent push from Obama administration regarding climate policy, favorable supply/demand situation and new creative ways of financing solar projects, this industry is finally getting out of doldrums. Three companies I mentioned are still good buys - FSLR ($40), SPWR ($20), SUNE ($8). These are survivors and could prove to be equivalent of Amazon, Ebay and Yahoo post dotcom bust. They are still trading at fraction of their all time high.
Summer is almost half-way done. So enjoy the hot whether while it lasts!
/Shyam