Selling Most of Excel Maritime into the Euphoria

Excel Maritime (EXM) has been performing very poorly, but today there is a 16% spike , so I am going to sell the majority (95%) of a smallish (0.7%) stake into this euphoria. I am exiting around $7.10. Part of this move is 'reflation' is the computers' choice today and part of it is according to TheStreet.com cape-size ships showed the first pickup in pricing after 13 days straight down. I guess the Chinese want to buy some iron ore today.

• Shares in the heavily traded dry bulk shipping sector were a bit stronger Tuesday, apparently bolstered by a spike in shipping rates after two weeks of steady declines.
• Dry bulk, the raw-materials freighters of the global economy, often see their stocksrespond, like an ultra-sensitive seismograph, to the minute movements of things like commodities prices -- anything, in fact, that might indicate an uptick in worldwide trade. The industry is especially dependent on Chinese steelmakers' use of Australian and Brazilian iron ore, which the bulkers haul across the oceans.
• According to the London-based Baltic Exchange, spot-market rates for the huge Capesize-class ships (the ones too big for the world's canals) popped nearly 6% Tuesday to $53,600 per day. That follows 13 straight days of declines. Helping the move upward: four Capesize vessels were booked Tuesday morning to haul ore from Brazil to steel foundries in China and Europe.

Again, this shows you how simplistic and "knee jerkish" things are in the market - Baltic Dry Index jumps one day - all the dry bulk shippers rejoice together. The article above used a great word - seismograph - to describe how the program traders are so sensitive to any tick in news in this group.

I learned long ago with the dry bulk shippers not to be too worried about the charts - they have a mind of their own. If the Chinese buy some more iron tomorrow these stocks can spike again; if not, then they can drop 10%. So the chart is only for entertainment purposes.

I will look to rebuy lower if and when; I won't short because charts are not respected in this group... more important is to know China's plan for chartering ships tomorrow.

Long Excel Maritime Carries in fund; no personal position

Comments

[coprophagous:]

The BDI is a very weak index which only relies on a tiny percentage of the bulkcarriers that are trading on the spot markets. The spot markets are the most speculative of all and are for single voyages and in no way represent a years revenue. The Dryships onvestors like Eagle anf Navios are mostly day traders that thrive on rumor and gossip and are not interested in fundamentals as long as the stock prices are moved up or down.
Dryships and the others are up to their ears in debt and have huge unfunded obligations on new ships and now oil rigs.
The banks will not renew their default waivers later this year and the companies will all face a severe cash flow problem.
The Chinese recovery is floated all the time but China's fortunes are heavily dependant on a recovery in the US and Europe which is highly unlikely before 2102.
Meanwhile the vast majority of the ships on order will be built allbeit delivered a year or two later, and meanwhile the Chinese are building ships for themselves in the their shipyards in the gaps created by the deferrals and the Iron ore suppliers are building and buying ships themselves.
As for the rigs only Brazil is active in deepwater exploration and the number of rigs on order will exceed demand until the oil price goes to $100pb which may not occur for years.

Jul 14 06:06 PM

[Mark Anthony:]

Ha ha! Good to get rid of the weak hands. We are good to go to $12 now. EXM was doen more than 50% in recent weeks and one up day you are selling?

I am not selling one damn share of EXM. There will be ups and downs but EXM should be back to $12 and then to $20 in no time. Especially consider how many shorts are in this shipping stock.

seekingalpha.com/artic...

Jul 14 09:19 PM

[Timmothy Posey:]

I thought this pop was due to Fast Money recommending it yesterday for its "Home Run" play. Guy Adami said it could go back to $60. People got greedy.

I'm long EXM and selling calls.

Jul 14 10:44 PM

[tedster98:]

2102? You may be very well right considering how O'Commie is destroying the country both economically, morally, and strategically.


On Jul 14 06:06 PM coprophagous wrote:

> The BDI is a very weak index which only relies on a tiny percentage
> of the bulkcarriers that are trading on the spot markets. The spot
> markets are the most speculative of all and are for single voyages
> and in no way represent a years revenue. The Dryships onvestors like
> Eagle anf Navios are mostly day traders that thrive on rumor and
> gossip and are not interested in fundamentals as long as the stock
> prices are moved up or down.
> Dryships and the others are up to their ears in debt and have huge
> unfunded obligations on new ships and now oil rigs.
> The banks will not renew their default waivers later this year and
> the companies will all face a severe cash flow problem.
> The Chinese recovery is floated all the time but China's fortunes
> are heavily dependant on a recovery in the US and Europe which is
> highly unlikely before 2102.
> Meanwhile the vast majority of the ships on order will be built allbeit
> delivered a year or two later, and meanwhile the Chinese are building
> ships for themselves in the their shipyards in the gaps created by
> the deferrals and the Iron ore suppliers are building and buying
> ships themselves.
> As for the rigs only Brazil is active in deepwater exploration and
> the number of rigs on order will exceed demand until the oil price
> goes to $100pb which may not occur for years.

Jul 15 03:00 PM

[Mark Anthony:]

So the author of the article sold EXM on July 14th in the low $7-ish. Two weeks later today, EXM is in the $9-ish. Told you that weak hands were selling and I would not be selling. There's plenty of room for shippers to continue to go up. There are plenty of impatient longs who sold too early waiting to get back in. Some never will do.


On Jul 14 09:19 PM Mark Anthony wrote:

> Ha ha! Good to get rid of the weak hands. We are good to go to $12
> now. EXM was doen more than 50% in recent weeks and one up day you
> are selling?
>
> I am not selling one damn share of EXM. There will be ups and downs
> but EXM should be back to $12 and then to $20 in no time. Especially
> consider how many shorts are in this shipping stock.
>
> seekingalpha.com/artic...

Jul 28 07:19 PM