Shipping Sector

  • 16 Jan
    Gruesome Industries For Trading, Not Investing

    Gruesome Industries For Trading, Not Investing

    • Even if the industry has wonderful growth numbers, profitability might remain out of reach.
    • We’ll define and describe the industries long term investors should avoid.

    Introduction

    Most of you are familiar with Warren Buffet’s comment on the airline industry in his 2007 letter to shareholders:

    “The worst sort of business is one that grows rapidly, requires significant capital to engender the growth, and then earns little or no money. Think airlines. Here a durable competitive advantage has proven elusive ever since the days of the Wright Brothers. Indeed, if a farsighted capitalist had been present at Kitty Hawk, he would have done his successors a huge favor by shooting Orville down.”

    Now, most connect the above statement only to the airline industry. However, in a deflationary environment where our youngsters expect lots of things for free—think WhatsApp—and extremely low interest rates, there will be more industries where shareholder wealth creation will be difficult to achieve.

    In today’s article, we’ll define and analyze some of these industries. More →

  • 28 Jun
    Is the Negative Cycle Ending in the Shipping Sector?

    Is the Negative Cycle Ending in the Shipping Sector?

    • Most shipping companies are down more than 90% and the short term outlook does not look bright.
    • After 25 years of 10% global fleet gross tonnage growth, 2016 is a turning point with growth lower than 5%.
    • Increased interest rates, fewer ships and constant global trade growth show that there are investment opportunities in the shipping world.

    Introduction

    It seems strange to analyze the shipping sector in the current volatile markets, but sound sector analyses help to keep nerves firm and to clearly valuate the opportunities a bear market brings. The shipping sector is interesting due to the fact that it represents a perfect example for a bottomless investment theory and an excellent investment opportunity for those who can and know how to catch a falling knife. More →