Ecomike

The Death of Shipping and BDI Is Premature

NMM is probably the safest play with a huge dividend. I still think PRGN is way undervalued.

BDI Signals Slack Demand for Raw Materials

I am not sure but I think you two missed one of my points. I must have seen a hundred or more positions taken lately saying that the BDI is an excellent leading indicator of economic growth, but I think for now there is too much noise going on from new builds hitting the water, dropping the rates, and China buying excess material at low prices, and then cutting way back to live off the excess inventory while prices drop back down, for the BDI to be the world markets pre-indicator anymore. Hell, the last huge run up in CAPex rates, and thus most of the run up in the BDI earlier this year, had a lot more to do with just port congestion in China, and China restocking from their inventories from the September 08 to March 09 crash in imports.

All I am saying is people are reading way too much into the BDI numbers the days. If anything, just look at the recent numbers, and if anything one would conclude it is very volatile.

BDI Signals Slack Demand for Raw Materials

If you remove the Capex from the BDI, as it is mostly indicative of iron ore and coal demand in China, the BDI looks more like a slow steady climb all year which is more indicative of true demand IMHO. China ran up the Capex part of the BDI earlier this year stockpiling, then they shut off the orders when Rio POed the Chinese by doing an investment deal with BP, instead of China. I suspect China artificially pushed the Capex rates up earlier to stimulate the world economy, while stockpiling cheap materials, trading dollars for hard raw materials, and spiking the demand for Capex ships temporarily to slow the Capex ship order cancellation rate in Chinese ship yards, which use steel from coal and iron ore by the way. I am surprised no one has mentioned this in blogs before now. By the way did anyone notice that the Capex nose dived right after Rio cut the deal with BP instead of China? Hmmm! Seems to me the Capex ships were running from Rio to China, and back, and then just suddenly stopped.

Eastern Winds Favor Diana Shipping

PRGN and EXM are way undervalued compared to DSX, and have much better PE values (2:1) right now compared to DSX. ESEA is another great value. DSX has no dividend, and no sign of intentions to renew a dividend any time soon. NMM, NM, PRGN, and ESEA are all paying nice stable dividends, and several have them have much lower PEs, making their upside potentials more attractive.

Excel Maritime Carriers: Set Up To Excel

Since the last posts here by others, the BDI went down briefly and then took off again to 980 on Friday, Jan 23, with the spot Capex rates nearing $20,000 per day! EXM announced taking delivery of it's new Cap ship and long term lease at IIRC about 35,000/day which is way over the spot market. I am beginning to realize that the spot market does not include the daily rates being paid on long term leases. Also it seems the giants like Cargil are grabbing up the new Cap vessels as soon as the hit the water (Cargil has taken very long lease positions on the recent newbuild Cap ships as (or before) they hit the water at rates 5 times to 8 times the spot market rates, makes me think they know something we don't know, as the Cargil group are not fools in this commodity game, and they seem to like brand new Cap ships).

My only concern this week is that the ship companies seem to follow the wider market which seems to be following oil and gas inventory reports and seems to be hiper worried about banks again, and the pending quarterly reports and jobs reports. I was encouraged by the IBM quarterly report which seemed to say that the world is not coming to an end after all. I wrote IBM off as a GE like, bloated over sized no where left to grow company years ago, especially when they sold their laptop company to China.

I am long on EXM, PRGN and SB and sold off DRYS. I won't be buying DRYS again at any price.

Winners and Losers in Today's Market

Interesting thoughts on apple's I phone, it may have a ways to go yet.

I think this last series of fiascoes with Dry Ships CEO's mistakes will be it's downfall for a while. Won't be surprised to see it get hammered back to $3.00 a share the next 5 weeks.

I own dry bulkers PRGN, EXM and SB. I sold out of DRYS after the bad news and I not planning to buy it even at $3.00 a share. I like dividends! And if EXM, PRGN or SB cut or eliminate their dividends I will sell them too!