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Strategies & Market Trends : Technical analysis for shorts & longs

SPY 691.88

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Jan 30 4:00 PM EST

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To: Cogito Ergo Sum who wrote (47450)	2/1/2012 8:14:02 AM
From: Johnny Canuck	Read Replies (2) of 70303

Thanks for posting the article. I think I would be more interested in the capacity utlization of the existing fleets as opposed to the day rates as a measure of economic activity. Unfortunately I don't think they track that number worldwide. You would have to go through the quarterly reports of the all the major shipper and by regions to get a better view of the amount of goods shipped. I get the impression shipping is the like the oil refining business. You will run the ships at low day rates even if you are losing money in order to reduce the burn rate of your cash. If you let the asset sit idle you are leting the equipment rust away, so you have to run them to keep them in working order. It would be interesting to look at a longer term charge of the BDI (decades). I am assume it goes through boom and bust cycles. They make outrageous amounts of money during the boom and lose large amounts of money during the bust. As a result the average P/E of ships tend to the low double digits/ high single digits.

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