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Old 10-01-2008, 04:45 PM   #241
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Here is one review of the sector.

Marine Transportation Industry Examined in Wall Street Transcript Report: Financial News - Yahoo! Finance
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Old 10-01-2008, 06:03 PM   #242
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Might it not be that part of the drop is attributable to the game of high stakes "chicken" that China is playing with its iron ore suppliers, notably Vale?
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Old 10-02-2008, 06:27 AM   #243
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I'm starting to think about adding some at this point. The dividends look good if they can keep paying. Anyone worry about any of them going bankrupt? Any choice picks?
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Old 10-02-2008, 06:52 AM   #244
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I think NM and EGLE are among the most stable in terms of time charter coverage, management, etc. DSX is low leverage, but because they are a full payout structure I would expect to see the dividend fall with a few quarters if day rates do not shoot back up. GNK might also be worth a look, although I do not follow them closely.
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Old 10-02-2008, 01:35 PM   #245
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Right - if the Saint's edge Minnesota in the Superdome my tech analysis/greed meter says buy a tad more EGLE.



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heh heh heh - good old balanced index on full auto lets me be be a wild and crazy guy in retirement. Of course I 'could take' the money and drive down, buy some tickets and spend a wild weekend or so in New Orleans but I was just in the area(Diamondhead) for a wedding. Go EGLE/I mean Saint's.
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Old 10-03-2008, 10:14 AM   #246
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was watching Cramer yesterday and he said the BRIC trade is dead. Brazil, Russia, India, China and with it any stock that is commodity related.

will watch NM, but it doesn't look good
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Old 10-09-2008, 09:53 AM   #247
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BDI index just continues to collapse down another 16 percent this week to 2500
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Old 10-09-2008, 10:49 AM   #248
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My question about shipping stocks is this-when they are not capital constrained there really is no limit on how many ships can be built, right? So inherently this will be a market timing situation for people who buy these stocks. It is like buying big homebuilders, or REITs in low barrier-to-entry markets.

If this is true, and one still is interested in this sector, at least now if there were to be a rebound in demand it would take a while for ship supply to respond and over-respond, so these securities could fly once more.

Any comments?

Ha
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Old 10-09-2008, 10:52 AM   #249
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I guess it's like buying any sector in the market, there's ups and downs. Just so happens this sector is getting crushed.

I'm holding a bunch of NM and I'm not happy at this point. But with this market pretty much everything is getting hit big time.
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Old 10-09-2008, 11:35 AM   #250
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My question about shipping stocks is this-when they are not capital constrained there really is no limit on how many ships can be built, right? So inherently this will be a market timing situation for people who buy these stocks. It is like buying big hombuilders, or REITs in low barrier to entry markets.

If this is true, and one still is interested in this sector, at least now if there were to be a rebound in demand it would take a while for ship supply to respond and over-respond, so these securities could fly once more.

Any comments?

Ha
The story in the dry bulk sector is that there are a lot of elderly ships floating around that normally would have been scrapped some time ago, plus there is a large orderbook stretching out to about 2011. People have been nattering about potential overbuilding for some time, which is always a risk with this sort of industry. Assuming that demand eventually rebounds (hard to imagine China won't continue building infrastructure, especially once the banking system stabilizes), there will be some amount of supply coming on to handle it.

Having said that, the current supply of ships existing and coming in stream is quite likely to be less than the orderbook would suggest. First, the bulk of the newbuild orders out there apparently do not have financing in place, which is a huge problem. There have already been numerous order cancellations and I expect many more to come. Many of the marginal shipyards have either failed or are not looking so good. Second, if day rates stay low for long enough the extremely old tonnage that has been limping around long past its expiration date will start to get scrapped big time. If the industry is oversupplied, there is absolutely no reason for anyone to charter a 30 year old rust bucket.

In the meantime, many companies have a goodly portion of the fleet on long term time charters. Assuming the counterparties do not default, they should be assured of stable cash flows for years to come. And NM has always traded in the FFA (shipping derivatives) market. I hope they shorted the hell out of the market before rates plunged.
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Old 10-09-2008, 12:19 PM   #251
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I went ahead and added alittle NM and DSX. I wonder if the dividends will hold up.
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Old 10-09-2008, 12:31 PM   #252
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Thanks for the well informed discussion Brewer!

ha
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Old 10-09-2008, 12:47 PM   #253
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Thanks for the well informed discussion Brewer!

ha
Any time. FWIW, the estimates I have seen of tonnage out there that is in the usual age range for scrapping is on the order of 25% of the fleet, and growing every year.
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Old 10-09-2008, 08:49 PM   #254
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Planning on adding more NM tomorrow, gulp.
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Old 10-10-2008, 12:31 PM   #255
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BDI index fell another 16 percent today. Wall Street Journal article from Monday claims 38 percent of voyages are returning empty with no cargo available for pickup even at these rates.
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Old 10-10-2008, 01:04 PM   #256
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Anyone follow esea? Picked some up recently and considering adding. Trading close to bv.

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Old 10-15-2008, 09:50 AM   #257
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Well I keep buying NM and I'm getting bloodied. I just bought more at $3.30. I'm done and just hope that long term this thing turns around. Hopefully they can stay afloat and maintain the dividend.
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Old 10-15-2008, 09:58 AM   #258
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anyone want to take bets it will bottom around $2.00 plus or minus $.30?
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Old 10-15-2008, 10:14 AM   #259
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Well I keep buying NM and I'm getting bloodied. I just bought more at $3.30. I'm done and just hope that long term this thing turns around. Hopefully they can stay afloat and maintain the dividend.

They have essentially all of their capacity chartered out at fixed rates this year and 75% next year and north of 50% for 2010, so I don't believe they have much in the way of real issues in the immediate future. Day rates have collapsed in the sector because the flow of goods has all but halted (banks aren't issuing the necessary letters of credit). But does everyone really believe that there will never be a need for grain, steel, etc. that all has to be shipped by sea? When the credit system starts working again the flow of goods will resume and demand for ships will again rise. I think the sell-off in this name is absurdly overdone.

This company has also always hedged and traded in the shipping derivatives market, generally quite successfully. I am quite eager to see how they did in the third quarter because if they called it right they had the opportunity to make a great deal of money.
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Old 10-15-2008, 03:06 PM   #260
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My concern is the BDI which has declined an amazing another 30 percent since my last post in just 5 days is saying what economic activity is actually occurring, that is that economic activity is rapidly collapsing.

If that occurs the contracts will prove to be unenforceable and worthless. This seems to be what the market is saying will happen based on pricing. After an eighty percent down move I am not going to argue with the market. I would wait for the BDI to get back over 5000 as a sign this market is recovering before buying any of these stocks. I was awfully close to buying NM at 7, only the falling BDI kept me from getting in.
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