The Aristocrats(tm): Bellwether's Shipping Stocks Revue Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : The Aristocrats(tm): Bellwether's Shipping Stocks Revue

DHT 13.03

+1.2%

3:59 PM EDT

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: sense who wrote (26)	10/17/2019 2:15:30 AM
From: sense	of 43

Risks vs. Rewards in Shipping Stocks ? Again, note, I'm only talking about VLCCs... as dry bulk goods and container ships are dependent on economic activity and trade... both in decline now... whereas people tend to keep using oil at some fairly constant rate no matter how economies and trading patterns change over time. Opportunity in shipping is defined by leverage applied against mismatches in the demand versus the hulls available... a shortage of hulls means leverage in moving higher... a surplus in hulls means leverage in moving lower... Risks: If the market crashes... the VLCCs will go with it, at least initially... but may sustain higher boyency if other factors dictate... as they likely will... which for my money makes them a better bet than others with less specific drivers. They could prove to be the one lifeboat everyone seeks to grab onto in a down market... and there's always something going up as everything else is going down. Call this one an up vote for a down market. If the growing war risks suddenly evaporate: Yeah. That would be bad... in relation to this trade. If Iran rolls over and sanctions are lifted... Yeah. Sure. That'll happen... eventually. War risks are more fully realized... preventing ships from moving. Probably one of the biggest real risks. Bad Timing. In too late, hold too long... then war breaks out and the market crashes... Biggest real risk. Rewards: IF other shippers get caught cheating... more hulls are lost to the trade. War risks keep growing... or are realized at a higher level of intensity... but not too much. War risks are fully realized... sinking competitors hulls but not yours... while pushing demand higher. Others recognize the opportunity... driving share prices higher... Companies convert higher rates to higher payouts... or special dividends... a common reward in shipping. Companies take advantage of higher prices... to sell hulls at the peak of the market... right before it crashes. Good Timing of Trades... in early enough... hold for not too long... Event Timing... the ponderous pace of events on the global stage... preserves positive conditions longer. Somehow, somewhere... non-Saudi pipelines explode... requiring many more ships are used instead... Timing ? Wait too long... and the shippers will resolve limits by selling hulls... or finding ways to avoid the punitive limits being imposed... I think you should expect this to be a trade that lasts 30, 60, 90 days... with a need for constantly hawking the news for any new wrinkles... and if conditions prove to warrant it... the leverage will keep working for you instead of against you... If you were watching DHT and noted them announce a repricing of the Convertible Note conversion price... and started buying right then... ? Similarly subtle clues on the back side of the trade shouldn't be missed...

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next