Shares of DHT Holdings (NYSE:DHT) have gone from below $6 per share to over $8 in less than 8 weeks. Given the current condition of crude oil markets, will investors or traders continue to benefit from a per share price increase because oil producers and futures traders' assets are now being stored on oil tankers? How is DHT Holdings positioned and can the company take advantage of this opportunity further? Let's find out.
Introduction
Scottish Economist John Law was appointed Controller General of Finances of France by Philippe II in 1716. Law created the General Private Bank, later renamed the Banque Royale (the first financial institution to issue paper currency). Using the bank, Law purchased the Mississippi Company, the business holding monopoly trade power in French North American colonies.
John Law then used his position as Chief Director to exaggerate the wealth potential of the Louisiana province. He also used the Banque Royale to absorb other joint stock trading companies creating the Company of the Indies. This consolidation and exaggeration caused share prices to increase dramatically. At its height, the Company of the Indies was valued at more than $6.7 trillion ($6,700,000,000,000.00).
In order to finance the endeavor, the Banque Royale began issuing notes with an implicit guarantee of the crown. Unfortunately, the bank issued more notes that could be backed by hard currency. As a result, the currency was devalued, there was a run on the bank, and the Company of the Indies collapsed. John Law had to flee France and lived abroad until his death.
As romantic, adventurous, and profitable as classic seaborne shipping seemed to be, the reality is quite often exactly the opposite. Sometimes, the prospect of profit is exaggerated but investors believe it anyway. Sometimes what seems like a legitimate investment is really just a house of cards. The Company of the
