Fundamental

Diana Shipping: Prime Rebound Candidate

I don't find the article informative. In fact the previous comment is more helpful than the article itself. The author is essentially arguing three things: 1. equity financing is better than debt financing; 2. dividend payout is better than reinvestment; 3. long term contract is better than spot contract. All are subject to debate, and answer should be "depending on the situation...". However, the author failed to put any of these in perspective of the dry-bulk shipping industry. That the increase of scraping rate will alleviate supply side concern, as contented by the author, will likely provide a false comfort. Ships have useful life of almost 20 years and the normal scrapping will only take out 5% capacity annually. Unless the author presents quantitative measure to show the current scrapping rate is significant, this point should not be trusted.