How low can you (the Dow) go, and when is the time to buy?

[unclemick]

Depreciation allowance - in this case ships.

Just guessing.

heh heh heh

 

[brewer12345]

Depreciation allowance - in this case ships.

Just guessing.

heh heh heh

Give that man a cigar (or a new pair of overalls).

Both EGLE and DSX pay out all ofg their operating cash flow. GAAP based earnings fall short because of depreciation, amortization, and other non-cash items. If either of them wants to buy more ships, they have to find a good enough deal that it is worth issuing more stock. I like the discipline this imposes on management.

 

[unclemick]

Brew - or anybody.

Shipping stocks seem to be relatively new kids on the block - didn't they used to be mostly private type arrangements?

What has changed on the world stage that going public is desirible - raising capital on market is preferable to private sources?

heh heh heh - nagging feeling that I might be the patsy here.

 

[brewer12345]

I think a couple of things happened. One, everyine is looking for return (I recently read an article on institutional investors buying farmland for investment purposes), and shipping companies can offer it in a tax-efficient manner. Two, the tanker companies went public 5 to 10 years ago and had a great run, so it was only a matter of time until the same happened for other types of ships.

In dry bulk, ownership is extremely fragmented. I think the public companies are engaged in a roll-up the way tankers did over the last 5 to 10 years. If the companies remain disciplined, returns can be very good.

 

[sgeeeee]

Right; and we ERs on the board are exactly in his boat. Good point!

Ha

My retirement plan has been favorably compared to Warren Buffet's. I can die now.

I hope I can mis-quote you on that, Ha. I want to put that on the dust jacket of the second edition of Engineering Your Retirement.

I guess I have to credit dusk_to_dawn for the comparison too.

 

[NinjaPigeon]

I dont think its going to drop that far, but I fully expect to see something close to 1000 by years end, maybe a little bit into next year.

And why exactly do you feel that the market has been overvalued and should return to a 2003 level? Exactly how much padding is there in the current valuations?

I don't understand what you guys see that would justify a 25% drop. Granted I know way less than you guys do, but when I expand the charts out to 5 or so years, I see a normal slope in the line with just a small blip at the end. Surely the 5% dip we just saw accounts for this already?

 

[LOL!]

I don't understand what you guys see that would justify a 25% drop.

With the emotions of human beings involved, there is no need for any justification to see a 25% drop.

 

[73ss454]

I just looked at the Japan and China markets and there both down about 2.4% so far for the session.
Should be interesting tomorrow.

 

[FinanceDude]

I still go back to October 9th, 2002..when the Dow hit 7286, and NOONE wanted to buy in............

But now, at 12,000 something, it's "overvalued"............

 

[FIRE'd@51]

Yep, and I remember Bill Gross saying that the DOW was going to 5000. Of course, at that time, the dividend yield on the DOW was higher than the T-Bill rate, so it was practically a no-brainer to move funds from a MM fund to stocks.

 

[haha]

I still go back to October 9th, 2002..when the Dow hit 7286, and NOONE wanted to buy in............

But now, at 12,000 something, it's "overvalued"............

So what are you saying here?

Ha

 

[cute fuzzy bunny]

I still go back to October 9th, 2002..when the Dow hit 7286, and NOONE wanted to buy in............

But now, at 12,000 something, it's "overvalued"............

Funny how we're wired backwards to run away from bargains/sales and then rush in when things are fully valued...? Except for real estate, we dont do it that way for any other purchase.

 

[FinanceDude]

So what are you saying here?

Ha

The DOW is probably the WORST index out there.......only 30 stocks, and market cap weighted.............

Let's look at a typical CNBC scenario: Microsoft reports lower than expected earnings on Vista, it drops $1.25 a share, the Dow goes down 100 points, and we have a "Chicken Little" event...........

FWIW, MSFT is in ALL 3 major indexes...............

 

[wildcat]

The DOW is probably the WORST index out there.......only 30 stocks, and market cap weighted.............

Wrong. The DJ Index is price weighted. The S&P Index is market cap weighted. At least you had the 30 part right

 

[FinanceDude]

Wrong. The DJ Index is price weighted. The S&P Index is market cap weighted. At least you had the 30 part right

Sorry.................tired...............