PermaBear ?

Permabear?
The obvious implication (being a permanent bear) is in itself not the worst thing Ski has been called. As an observer/commentator of the marine transportation industry I read a lot of news relating to shipping from perspectives gathered from around the globe. Did I mention reading a lot of news? Anyhow, I can see how easily Matt or any other reader could describe me as bearish on bulkers. A coy smile came to me as I recall telling all of you how I call the folks at WeberSeas the “bad news bears” because they always are smacking us with some bad news. Now I suppose the shoe is on the other foot, and it is my writing that spoils the mood. Please send me all the good news to be found and I would gladly report on it.

Long BALT why so glum?
This will be hard to answer without sounding …you know, bearish. This shipping investor has just purchased shares of BALT@~$11.00 he intends to hold for 10+ years and is projecting estimates of Peter G paying dividends based around a nickel per share for every 100 points above 2000 on the BDI. “do you believe my "nickel a share" back-of- the-envelope guess? And what are you willing to pay for that kind of
leverage you might get over a BDI of 2000? Any better, more educated
guesses? Is this a good way to think about this?”.

The 10+ year timeframe is a very long time to assume that the shipping markets will even resemble what they do today. Ten years ago China had just a few shipyards and today nobody can count them all. Ten years ago the rest of the world made more steel than China alone, btw not true today. This (shipping) is not a very predictable sector as with the stroke of an ink pen governments can change trade patterns that have enormous impact on trade. Seasoned shippers will remember when Carter signed the Soviet Grain Embargo and the unexpected results. The Russians turned to South America and had great success converting the continent into major agricultural exporters that were to feed the Russian Motherland. After a few years major exporters in SA joined hands and became Mercosur and once again their “union” was observed having drastic effects on the world trade patterns. The unexpected closures of the Suez have changed a great many investors fortunes. None of these events were calculated or projected to occur when they did, yet they all had profound effects on shipping demand.

A quick glance at the BDI 10 Halloweens ago shows 1759. To hope for 10 more years of 2000 point average levels may not be a bad base number to speculate your position because regardless of my reputation I am Bullish that shipping will survive. That is not to say I think publically held shippers will always be afloat. With the stroke of a pen all the public shippers can return to being private entities.

I wish you Good Fortunes with your position and look forward to congratulating you Ten years from now. I remain convinced that present investments in common stock of all shipping equities are better suited to attentive momentum investors when compared to traditional Longs. The fact is I continue to hold shares Long in several shippers. These were purchased when I had a different understanding of the bulkers and what moved the share price. The money I used holding these shares has not performed as well as the money I use when following the market swings. How could I recommend a true Long to any new investors?

Permashipper
Ski