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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: anializer who wrote (37337)	4/11/2010 9:56:51 AM
From: Walter Bagehot	1 Recommendation Respond to of 78740

You're right - the stock market is totally illogical, hence my attraction to investing from a value perspective where I don't have to forecast the future as far as possible. What I am trying to do is to gain a feel for where the downside would lie, and hence where the floor might be, and what a margin of safety would look like in this industry - I do have some criteria that I previously mentioned would cause me to invest in a stock in the sector, but I don't see any businesses with those characteristics available to me. If there were, and I could invest with no regard as to the forecasts, sleep soundly, and not have to hope for many moving parts to go well to get my money back, I would be investing in that business. My scenarios were intended to demonstrate that there is an illusory margin of safety in buying these stocks at a low P/E, and awaiting a re-rating upwards. On the contrary, I don't see a trigger for such a re-rating given the supply/demand imbalances involved. Handysize rates, in fact all rates, will move in a volatile manner as demand to move particular shipments will depend upon how many suitable vessels are in the area of a particular port at a particular time; I ignore those rates as they have little bearing in my opinion on the investment characteristics of the market. As Graham wrote "the speculator's interest lies in anticipating and profiting from market fluctuations; the investor's interest lies in acquiring and holding suitable securities at suitable prices" I just can't view many shipping stocks as either suitable securities or suitable prices at present. All in, an interesting discussion though! Regards, Alex