Agree the look and feel of the market now is "enforced pause"... They are deliberately "sitting on the trade" to reduce the volatility... to prevent accelerations... and that mostly makes it a market to avoid, since in outcomes there's zero connection between the skills of a stock picker or a chart trader... when the interventions stifle market functions... and make the charts tell lies.
Direct government intervention in the markets now... probably not fully appreciated by many participants... likely is not limited just to $ being thrown at the markets by government... but includes even government directly buying ETF's. The renewed suppression trade in paper metals could be government loading up on paper gold and paper silver... the government's agents using "the tools available" to control the market moves... while strategies are executed. Or, it could be Fed or member banks interventions backing the suppression trade... straight up. Either way... the only honest markets left are the "accelerated" markets like the broader market in most of the month of March...
The solution to much of the global economic problem is a weaker dollar... so sustaining the gold and silver price suppression makes very little sense seen in the proper context... in which the suppression is very directly a part of the problem imposing the currency imbalances... artificially suspending recognition of inflation... when what's needed to fix the problems isn't "printing money" to create new inflation... but only allowing recognition of that already created ? As always, policy often works opposite as its stated intent...
Still, there are individual stocks that have been beaten down enough... many that were already beaten well enough before Feb 24th, having been beaten again, are genuinely good deals now... Those shares already down between 70% and 90%... if they haven't some underlying weakness in financial risks as a ticking time bomb... are far less risky now than those down major market issues down only 50% with ongoing "market support" that might not last. Too few in the market appreciate "price change" as a core element in business risk... so that oversold crap is often a better buy than overbought Hedge Fund darlings... but, price stability is still a function of who the other holders are. Traders prefer volatility... while investors may prefer stability ?
I wouldn't load up on stocks that still sustain half or more of the same price risks they had on Feb 24th...
But, others... are only better opportunities now than they were before the first round of price cuts...
Clearly, the Tanker stocks... are in an actual bull market now, with that being driven by the still rapidly expanding,,, still early... need for additional floating storage. The downdraft in the rest of the market has dragged them down too... expecting their large debt loads might pull them under... a still growing risk for the container shipping stocks... when, for now, that leverage in tankers instead favors their out-performance. When "normalcy" returns to oil markets... it will still take many months for supply imbalances imposed now to be worked out... and the investors loading cheap oil on ships for storage now... might not let go of those ships for a few years... until oil prices are near highs again... exactly as has happened in the past.
DHT far and away the best managed choice... which allows them to succeed better than others in tough times... but, in the tanker business... these are not tough times. There's more leverage now in a company that is under-priced... in the expectation hard times make its debts harder to carry... so under-priced because it is over leveraged... "wallowing in debt"... when in fact the leverage, now, only amplifies returns rather than putting them at risk.
'Tanker Tantrum' - How Crude's Record Contango Has Created "Greatest Trade In Decades" |
