Since this volatile speculative stock holds the majority of my current wealth, I am going to give my rationale on it.

The main reason I like LDK over the other solars in the industry is that it is planning on making a polysilicon plant.  Polysilicon is the major raw material in solar, and it is  in high demand driving the prices to record highs.  Most companies are struggling to obtain this precious resource and high prices are squeezing the margins of most solars out there.

Polysilicon production is a very capital intensive process, and it is going to take a while for new capacity to come online.  LDK is investing over $1 billion in its own plant to put some perspective on it.

If LDK builds its plant on time, it will be the hottest solar stock in 2009. LDK would be producing gold, and It could make about $8 EPS in that year if it goes according to plan.  Since LDK is trading in the 30s now, it has the chance for a nice multi bagger.  Even if there are some complications along the way,

LDK has sold out its current Solar productions to reputable companies like Q-Cells and STP.  These companies are giving LDK prepayments for the solar wafers, which shows that they are putting faith and money into LDK.  Q-Cells profits will be tied with this deal, so they aren't going to go with LDK unless they think that LDK will deliver.

There are many other reasons I like this stock which range from the management to political issues, but I will save time and go over the risks associated with the company, because they are even more important to consider when investing.

There is no gaurantee that LDK can get its plant up in time and it could be delayed given that it is a very complex process to make polysilicon.  This would make LDK's profits suffer in 2009 although they can make it up in 2010.  There is even a chance that they wouldn't pull it off at all, which would cause the company even more trouble.  This is what I am most afraid of personally.

There are also a lot of companies expanding poly capacity, and many new ones building plants for the first time.  I am not too worried about in newcomers because most don't seem to have the seriousness to get a plant online as fast as LDK.  There is the threat of companies like MEMC and Wacker expanding production offering more competition to LDK.  Looking at current trends in production and solar demand, it looks like there will be a shortage in polysilicon until at least 2010, offering an opportunity for LDK to get into the industry.

Being the solar industry, there is always the threat of disruptive technologies overcoming PV silicon solar.  I am not too worried about current thin film offerings, but if the technology matures bringing up its effeciency, it will be trouble.

There are also new developments that come out every year which are suppose to revolutionize the industry.  The good thing is that each of these supposedly new breakthroughs seem to take forever to reach the market, so there is plenty of time to see the trends change.

Luckily LDK is so cheap that most of the risks are already priced into it.  Since I am young and am an extreme capital appreciation mode, I figure the risks are worth it.