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Old 10-15-2008, 10:11 PM   #261
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Even NPR introduced the meaning of the BDI on their Marketplace show. Said that companies are "telling their captains to wait at anchor rather than lose money". But, I don't know why they'd be losing money if they have a contract. Must just be talking about spot rates or whatever.

Not that they are the know-it-alls, but it just goes to show how quickly things have changed. My question is the timing of a rebound, which brewer has addressed.

-CC
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Old 10-16-2008, 09:10 AM   #262
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Even NPR introduced the meaning of the BDI on their Marketplace show. Said that companies are "telling their captains to wait at anchor rather than lose money". But, I don't know why they'd be losing money if they have a contract. Must just be talking about spot rates or whatever.
Relates to spot rates. A prominent Israeli owner publicly stated that they will idle their spot capesize fleet and they are a significant player in the spot market (upwards of 5% of the total fleet on spot).
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Old 10-16-2008, 09:58 AM   #263
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Scares me, but I actually listened to brewster and bought some NM yesterday. Not very much though.
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Old 10-23-2008, 01:09 PM   #264
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The shipping stocks are still getting battered. I sure am tired of these big drops. NM is down to $3.00 now, maybe it will hit $2.00. I'm done for now. I'm not adding any new money and I'm not selling. Its seams alittle late to sell now anyway.
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Old 10-23-2008, 03:54 PM   #265
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The shipping stocks are still getting battered. I sure am tired of these big drops. NM is down to $3.00 now, maybe it will hit $2.00. I'm done for now. I'm not adding any new money and I'm not selling. Its seams alittle late to sell now anyway.
I feel your pain. I own it too. I might as well hold on and watch it go to zero.
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Old 10-23-2008, 04:27 PM   #266
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I'm thinking of adding to EGLE - I haven't bought any since ?

As a short term trade to keep the hormones happy - if it doesn't do well in 7-10 years I'll pull the trigger and sell.

Saint's aren't doing that well so I may play with a few stocks. Dang foreigners bought BUD before I could get off the couch.



heh heh heh - meanwhile back at the ranch - those Vanguard computers are rebalancing my Target Retirement.
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Old 10-24-2008, 09:31 AM   #267
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Interesting item on NM they are planning on paying out $.78 per share for holders of 10/31/2008 38 cents for the third quarter holders of record 10/31/08 and .40 for holders of record at 12/31/08. Which means at the present price of 2.80 you would be getting the stock for $2.02. Wow, I think I'll listen to the archived conference call.
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Old 10-24-2008, 11:24 AM   #268
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I believe that div increase is for NMM which NM owns something over 50% of -- NM has not indicated their next div but even if it holds the current level would be paying around 12-13%.
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Old 10-24-2008, 01:36 PM   #269
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I believe that div increase is for NMM which NM owns something over 50% of -- NM has not indicated their next div but even if it holds the current level would be paying around 12-13%.
Well that certainly makes more sense, I need to listen to the call. I thought that was extraordinarily odd, I should read the Yahoo mail more closely! Thanks for setting me straight
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Old 10-24-2008, 06:36 PM   #270
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As I sailed from Bainbridge to Seattle there were a bunch of dry ships at anchor (looked like grain carriers), more than I ever recalled seeing before. The harvest should soon be arriving at the terminal but usually these ships don't waste payroll anchored out.
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Old 10-30-2008, 06:42 PM   #271
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I made my first investment in this sector a few weeks ago-NM. I'm down 25% from entry, kaboom almost overnight. I really know nothing about this industry, and in reading over several blogs and boards that cover it I think there are quite a few details that will take a plodder like me about a year to figure out.

Right now all I want to do is to satidfy myself that they are not going to find themselves violating debt covenants or going broke. That is all it will take for investments at recent prices to be quite successful over time. Commodity industries always boom and bust. As long as you have a survivor, best time to invest is in a profound slump.

In speculative industry what I want is a very strong company. Then buy an amount that might turn into $100,000 or so in a boom, and will p*ss me off but not kill me if it fails.

My time constraints are such that I could handle quite a few investments of this general size, so success could be very meaningful.

Ha
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Old 10-30-2008, 08:39 PM   #272
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I made my first investment in this sector a few weeks ago-NM. I'm down 25% from entry, kaboom almost overnight. I really know nothing about this industry, and in reading over several blogs and boards that cover it I think there are quite a few details that will take a plodder like me about a year to figure out.

Right now all I want to do is to satidfy myself that they are not going to find themselves violating debt covenants or going broke. That is all it will take for investments at recent prices to be quite successful over time. Commodity industries always boom and bust. As long as you have a survivor, best time to invest is in a profound slump.

In speculative industry what I want is a very strong company. Then buy an amount that might turn into $100,000 or so in a boom, and will p*ss me off but not kill me if it fails.

My time constraints are such that I could handle quite a few investments of this general size, so success could be very meaningful.

Ha
Ditto, pretty much. I'm down about 17% on my position just recently acquired. I'm still educating myself but I also agree that there are many stocks around that have been summarily shot without regard for fundamentals and/or are just deeply discounted due to cyclical economic factors; like NM. I can afford to take a position at these beaten down prices and hold for the long term and reap the reward on the steep rise when the global economy picks up again. I don't have to time it that closely to make a good return by my standards.

Hope we're right!
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Old 10-30-2008, 09:31 PM   #273
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I own NM too, but I am down a WHOLE lot more than you guys. I'm just hoping to break even.
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Old 11-05-2008, 01:14 PM   #274
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I own NM now at an average of around $3.30 or so. Hard to figure this one. It seems to go up when the other shipping companies are down, and vis-a-versa. What's up with that?
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Old 11-05-2008, 02:58 PM   #275
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I hae a small position in NM, taken without a whole lot of understanding. I still am deficient.

Balance Sheet: NAVIOS MARITIME HLDGS INC - NM - CNBC.com

Have a look at the blance sheet over the years 2005-2007. Stockholder equity increased almost 3 times over, while shares outstanding increased less, only 2.41 times. So equity per share increased, a good thing.

But even so, there is a hazard in this business model, at least as I see it. NM goes to the equity markets to fund its growth. They of course also borrow, but if the number of ships is increasing and revenues growing, they would quickly get overleveraged without the equity infusions.

No doubt at times like today when the cost of equity capital is very high for NM they can get along by throttling back growth. To what extent I don't know, because I don't know the conditions of their ship orders.

And of course, sooner or later they will have to refinance existing ships, just like a REIT will have to refinance a certain portion of mortgages.

You make the most money when you have liquidity when it has dried up for others. That situation is unlikely to happen here, even if NM is better positioned than some others- esp perhaps than the MLPs whose business model requires greater % payouts.

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Old 11-05-2008, 03:39 PM   #276
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But even so, there is a hazard in this business model, at least as I see it. NM goes to the equity markets to fund its growth. They of course also borrow, but if the number of ships is increasing and revenues growing, they would quickly get overleveraged without the equity infusions.

No doubt at times like today when the cost of equity capital is very high for NM they can get along by throttling back growth. To what extent I don't know, because I don't know the conditions of their ship orders.

And of course, sooner or later they will have to refinance existing ships, just like a REIT will have to refinance a certain portion of mortgages.

ha
A few comments:

- NM has indeed issued equity a few times in the past couple years to finance growth. They have also issued senior unsecured bonds. However, the equity is in place and the company is a much larger, more diversified animal than it was 3 years ago. I think they are or will be largely self-funding in the future.

- NM has a bunch of ships on order, but at least half of the ones they planned on owning outright already have long term charters on them that will essentially completely pay back the debt on the associated ships. They also have a bunch of ships on order that are to be leased. My guess is that they will be able to tread water on the leased ships even at curent reduced day rates. As for throttling back growth plans, they can arguably do a number of things. The ones that make the most sense to me are either delaying delivery of some of the ships or simply walking away from deposits on some orders for ships yet to be chartered. GNK just did the latter on 6 ships. I estimate that NM would not have to do so on many ships to make a huge difference on the liquidity front (which isn't terrible to begin with).

- Most of the company's debt is associated with specific ships. It is recourse to the company, but the time charters in place will service and pay back the debt without much fuss. The looming maturity that could inconvenience them (IMO) is that of the $300MM face senior bonds. But they are not due until 2014, by which time the world will be a different place.

I think that in the short term there are two major risks, both of which the company has hopefully mitigated. The first is potential defaults in the FFA market, in which NM trades regularly. They got stung in a minor way a year or so ago and indicated they were getting serious about counterparty risk inthe FFA market, so hopefully they did so. The second is defaults on teh part of charterers. Knowing how volatile the bulker market is, NM had their charters guaranteed by a highly rated third party. If this third party is the same one NMM uses, then NM's charters are guaranteed by an agency of the Belgian government.

Long term the risk is that the dry bulk market never recovers from its current sorry state. Hard to imagine that being the case unless you think China and India never resume growth or magically source lots of new resources (coal, iron ore, grain) that do not have to be transported by ship.
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Old 11-05-2008, 03:49 PM   #277
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With a P/E under 1, there's something there we're not seeing.....or know about.
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Old 11-05-2008, 03:59 PM   #278
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Yeah, yeah, I forgot to mention the thing about the space aliens.
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Old 11-05-2008, 04:00 PM   #279
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Wait! I'm on your ignore, there's no way you saw that post.
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Old 11-06-2008, 08:13 AM   #280
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Brewer, thanks for your comments.

Here is a piece from the London Independent Business giving a little color on the current market situation:

Shipping: Holed beneath the waterline

The staggering and sudden decline in the cost of chartering a cargo ship reflects both the global economic slowdown and the ongoing credit crunch. Sarah Arnott reports
Thursday, 6 November 2008


Hold on to your hat: the Baltic Dry Index was down at 826 points yesterday, a shattering drop from its high of 11,793 in May.

Shipping: Holed beneath the waterline - Business Analysis & Features, Business - The Independent

Ha
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