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Strategies & Market Trends : Value Investing

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To: Mr.Gogo who wrote (46470)	2/4/2012 10:23:00 PM
From: Spekulatius	Read Replies (2) of 79061

>>Yes, it has. But Clownbuck is right about the supply of ships. I researched yesterday and found out that the supply of ships has increased a lot in 2010 and 2011. I don't think this is the only reason, but it is very difficult to find relevant information. It is not a very good way to forecast anything(IMO).<< Sorry I don't have good sources about ship supply right now. I studied this more about 2 years ago and it was clear to me that even if trade growth by moderate amounts, the supply of new ships will be larger than what is needed to negate ships being scrapped and the capacity needed for move increased trade (unless you assumed that trade volume would explode). Permabears often use the Baltic index to point out that global trade falters, but like all free markets, the freight prices are a function of supply and demand, so low prices mean that supply meets demand at the current low prices and nothing else. It is really a similar situation that the current NG glut and the low NG prices that come with it; which is not a sign of demand faltering, but caused by increased supply from shale gas.

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