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  • A Surprising Gold Chart [View article]
    A 10 or 20 yr. chart would be informative.
    Apr 22, 2015. 10:57 AM | 1 Like Like |Link to Comment
  • Dry Bulk Shipping: 1 Step Forward And 2 Steps Back [View article]
    Thanks PM.
    The price for a 4-5 yr.old 35k/dwt bulker is now range 13-13-5mm for korean or japanese built down 4-5mm since dec. '14. Knock off a couple of mm for chinese builds.
    The all time low was 9.5mm for a 25k/dwt in '02.
    The current spot market sucks but 3 year cover can be gotten vicinity 9k/p/d.
    Remember the charter broker will take 2-2.5%.
    Get tech. oper. quotes from 3 reputable sources.
    Figure scrap at about 4mm.
    Note that in the handi zone(25 to 39k/dwt ) that 30%+ of the fleet will be scrapped over the next 5-10 yrs.
    Rates must rise to support 22-24mm newbuild prices. As this happens your cash flow increases as does your asset value based on future expectations.
    I don't bother with prognostications of future inflation as it leads to circular arguments.
    Once delivery costs are covered and cash flow stabilized keep 500k in w/c and return the rest to bank/partners.
    Apr 17, 2015. 12:49 PM | 1 Like Like |Link to Comment
  • Dry Bulk Shipping: 1 Step Forward And 2 Steps Back [View article]
    J, The handi's are useful for coal to a limited extent, usually to LDC's where there are no modern facilities. A preponderance of coal as well as iron ore is shipped in Cape's and Panamax's. They need to be "ore strengthened". The cubics on ore are ridiculous. You fill app. 1/8th of the hold to reach max capacity. You bring the bottom of the holds in like an ice cream cone with extra steel plate.These do not have gear and in a lot of cases are to long, deep , require too big a turning basin etc. to service the thousands of ports where the handi's trade.
    The cape size fleet is new, with more on the way in a way oversupplied market. Disaster looms in that space for the next 10 years, the handi's are a different demographic against a different age profile. This market should prove quite profitable over the next 3-7 years as older tonnage is scrapped and the order book is collapsing.
    Again, the problem is a pure play. Most of the listed co's have a melange of vessels. Age is now critical as we wait for the reversion to mean or better. Who needs pricey Park Ave. office space, limo's, private jets and town house's in Mayfair. Commercial and technical management companies will be owned by family members of the bk's but never go away. When I worked on the street it was called the "alligator spread", nothing happens, but the client gets eaten by commissions.
    Best to raise 4-6mm. with some like minded people, buy a modern-3-5 yr. old with modest leverage, keep at least 1-1.5 in operating capital and pay yourself a 4-6% divvy p/a and expect to sell in the high teens in 5 yrs. when you have a 9-10 yr. old on the upswing.
    Do not expect a super cycle like 03-09 in you life time unless you are young. It's a 25-30 yr. cycle.
    Apr 16, 2015. 04:59 PM | 2 Likes Like |Link to Comment
  • Dry Bulk Shipping: 1 Step Forward And 2 Steps Back [View article]
    James, The industry is highly fragmented into sizes and uses. Very little iron ore is shipped in handi size ships.
    A majority is shipped on cape size vessels anywhere from 150k/dwt and up.
    This sector is currently in an extremely depressed state. The "smart money" expecting a resurgence to old growth rates of chinese consumption poured money
    into the sector. They will be stuck in shipping hell for the next 10 years trying to get their money out or will shuffle the losses from one in house fund to another to hide the disaster. Further to this thought, Vale has several 400,000 k/dwt ore carriers in use with many more on order. They were excluded from trading china till they took a chinese partner. These displace 2 cape size for every 1.
    Then looking down the size curve you have kansarmax, panamax, post panamax,
    handimax, and handi's. For trading purposes they all have different features.
    For the most part, handimax ( 39,999k/dwt to app. 55k/dwt ) and handi's ( 25k/dwt to 39,999 ) are geared ( on board cranes) enabling them to trade all ports world wide, particularly the ones in developing areas where shore side cranes are not available.These little guys are the work horses of the world fleet.
    You need to look at the age profiles of each segment to base a recovery scenario on.
    There are very few pure size plays in the stock market arena. I follow quite few and most are leaking oil (cash). Expect several bk's soon. Even if engineered to hide the facts at pe firms, the public stockholders and probably bond holders as well will suffer.
    Apr 16, 2015. 10:28 AM | Likes Like |Link to Comment
  • Greece Versus Lehman Brothers: One Significant Difference [View article]
    looking forward to a nice vacation and reasonable prices in Greece denominated in Drach.
    The world will not end, but the Germans will have to find someone else to bugger.
    Feb 18, 2015. 09:12 AM | Likes Like |Link to Comment
  • How The Baltic Dry Index Predicted 3 Market Crashes: Will It Do It Again? [View article]
    A) New BDI will have to decline to app.433 to match old index to low.
    B) Your time reference is very short sighted, try running your charts back to the 60's.. This will clearly show the cyclicality here.
    C) World trade in commodities continues to climb between 3 and 5+% every year.
    There are too many vessels still coming on stream. Current problem is being exacerbated by PE as the traditional shipping banks which traditionally ruin the market by opening the taps are underwater and not lending which would ordinarily self correct the market.
    D) BDI heavily weighted towards cape size and panamax. These are heavily dependent on iron ore and coal.
    Feb 18, 2015. 09:06 AM | Likes Like |Link to Comment
  • A Tanker Tanks: Term Structure In Oil Screams 'Buy The Dip!' [View article]
    Thanks Bill, You just saved me from writing a piece on this disinformation.
    Feb 17, 2015. 08:51 AM | 1 Like Like |Link to Comment
  • Why Crude Oil Prices Will Have To Fall Hard [View article]
    Expect a handle that starts with a 3 this year.
    Feb 14, 2015. 11:02 AM | Likes Like |Link to Comment
  • Greenspan: Greece Exit Only A 'Matter Of Time' [View article]
    socialism is a wonderful governing tool till you run out of other peoples money
    Feb 11, 2015. 09:09 AM | 3 Likes Like |Link to Comment
  • Falling Commodity Prices Deal A Sharp Blow To Australia's Economy [View article]
    Let me know when the aussie $ gets to $.62..
    Feb 10, 2015. 11:29 AM | Likes Like |Link to Comment
  • History In The Balance: Why Greece Must Repudiate Its 'Banker Bailout' Debts And Exit The Euro [View article]
    Goldman Sachs etal. helped Greece cook the books so they could borrow the money.
    The creditors should chase IB's for their losses.
    Feb 5, 2015. 12:33 PM | 2 Likes Like |Link to Comment
  • Baltic Dry Index Crushed, Avoid Dry Shipping [View article]
    Baloney. There is no decline in world trade, it keeps moving up. There are too many vessels contracted in the boom of 07-09 which were delivered in 10-14. Idiots in PE didn't help either.
    Mr. Soden, all that crap moves in containers on container ships, not dry bulk ships.
    The BDI is heavily weighted to Cape size and panamax sizes which are being crushed by chinas slowdown. Nearly everyone expected chinas voracious appetite for iron ore and coal to increase forever so they ordered ships. Over the next 5-10 years a lot of tonnage will be turned into toasters and razors and the market will attain equilibrium.
    The industry has an established 25-30 yr. cyclicality.
    If there are any out there, find a company with a relatively young fleet and low leverage and you'll do fine over time.
    Feb 5, 2015. 11:03 AM | 6 Likes Like |Link to Comment
  • The Lunatics Are Running The Asylum: Draghi's Money Printing Bazooka [View article]
    ps: Bravo SNB.. I guess the shareholders in SNB have spoken
    Jan 24, 2015. 09:39 AM | Likes Like |Link to Comment
  • The Lunatics Are Running The Asylum: Draghi's Money Printing Bazooka [View article]
    The Chinese will dump the peg. Look for 10-11 on the yuan.
    They're getting eaten alive by Vietnam, Camb. Thai. Malay. Indo. etal.
    I look forward to leisurely extended european vacations at 85 to 90 cents.
    Jan 24, 2015. 09:38 AM | 1 Like Like |Link to Comment
  • Switzerland Wins As Its Central Bank Surrenders [View article]
    Bravo SNB. Just my take, but by 16' Yuan at 10, Yen at 160 and Euro at par.
    The Swiss will do just fine, they always have.
    Jan 21, 2015. 09:55 AM | 1 Like Like |Link to Comment