There are apparently a lot of people who disagree with my contention that solar stocks are in a "fad" phase.

A few days ago, I wrote a piece noting that many of the solar stocks have been looking faddish. I talked about what fads look like and how to recognize them as they come and go.

That view elicited a flurry of emails, with comments ranging from "this time is different" to accusations that I'm part of a conspiracy to keep the prices of these stocks down.

Coincidentally, the day the first article published, the solar stocks were up strongly -- double digits in some cases -- and today the group is getting hit very hard on a profit warning from Suntech Power Holdings ( STP). This sort of volatility, almost a pent-up energy, is also evidence that the stocks are a mania or fad. The behavior of the stocks is a reliable indicator.

The this-time-is-different emails expressed varying opinions about the state of solar, the cost of fossil fuel and so on.

Unfortunately, these folks seemed to miss my point. Solar itself isn't the fad -- the current crop of stocks is.

The amount of emotion that these stocks engendered just adds evidence to my theory that the stocks are in a fad phase.

I'd like to revisit my comparison of the solar fad to the Internet bubble. The actual Internet has lived up to all the hype, but many of the stocks did not. Eight years ago, I think, many folks would have expected Exodus Communications and Commerce One to be long-term players and a stock like The Knot ( KNOT) to be the fad -- yet only KNOT survived.

A comparison between something like Exodus and one of today's popular solar stocks will likely draw another email or two, but recall that Exodus was considered by many to be a can't-miss stock, yet turned out to be an early failure.

It remains to be seen how these companies, such as First Solar ( FSLR), Suntech Power, LDK Solar ( LDK), Akeena Solar ( AKNS) and SunPower ( SPWR), will respond to the fast-changing environment.

Eight years from now, assuming solar energy is as viable as many readers think (and as viable as I hope), it is not far-fetched to think that there will be a different roster of companies in the space than there is today.

The lack of openness to this possibility among the people who responded to my first piece is a warning. This should send a message of moderation and an understanding that segments like solar (we can also include every other narrow segment, like the shipping stocks, royalty trusts, emerging markets and so on) are always evolving.

I received similar emails in the past when urging moderation with emerging markets in early 2006 (those markets had a correction in the second quarter of that year), as well as anytime I have ever urged moderation with the energy trusts (which were then hurt, for example, by Canada changing the way the Canadian trusts are taxed).

Even if solar energy exceeds all expectations, there will be companies that come and go. This is a natural byproduct of new, fast-growing segments that attract start-up money and promise fast growth. So are successes and failures.

Anyone reading this article or the last, who isn't blinded by emotional devotion, can hopefully realize the pattern at work here for what it is. It has happened many times before and will happen many times more in the future.

New and important technologies (in energy, medicine and so on) come along and change our lives. This creates excitement in the stock market before, during and after widespread adoption of these new things. With history as something of a guide, it makes sense to expect that many of the stocks that create excitement in the "before" phase will not survive to the "during" or "after" phases.

This is not a bad thing, nor does it mean there is a conspiracy against them.

It's just capitalism at work.
At the time of publication, Nusbaum had no positions in any of the stocks mentioned, although positions may change at any time.

Roger Nusbaum is a portfolio manager with Your Source Financial of Phoenix, and the author of Random Roger's Big Picture Blog. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Nusbaum appreciates your feedback; click here to send him an email.

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