Vincent Fernando

Never Enough Lessons on Forward P/E

btw, I have done the dry bulk supply/demand math in the past using industry research data from Clarkson and Marine Strategies International. Roughly, Global demand growth in a bullish scenario for china is in the high single digits (and this includes both volume and distance effects), while 2009 - 2011 supply growth goes from about 10 - 18% per year (I think about 10, 14, 18 in that order), even with about 25% cancellations factored in. These are rough numbers, but when I did the math it was clear that supply growth was going to be well ahead, with room for error, of demand growth. The scary thing is that in a bearish near term china scenario, global demand could actually go negative. If a negative growth rate butts up against a 10%+ supply growth rate, rates would collapse substantially further to perhaps something like BDI 1,000.