What We're Reading

shippers (3)


Turnaround Tuesday Reads

  • Saving down, lending up and tapering combine in a perfect storm.  One of our favorite bloggers CalifiaBeachPundit
  • More tech companies are experiencing DDoS cyber attacks including SAY Media (Typepad), Meetup, Basecamp, Vimeo, Bit.ly and others.
  • 51% of Americans are unsure of the validity of the Big Bang theory.  For many it's because it can't be seen or seems too far away  A look at the iron triangle of science, religion and politics,
  • For the first time in history, the rich find themselves working longer than the poor.
  • The Fed must choose:  more jobs or lower inflation.
  • Shipments through the port of Los Angeles jumped 34% spurring a bit of (recovery) conversation today on Wall Street
  • Google follows Facebook and Twitter with app-installed advertising.

Read More, Comment and Share......


Rising From The Ashes: Yes $BDI


This in follow up to my February post pondering if the shipping index had bottomed which was most definitely chucked in to the round file by most as the market has become convinced the industry is dead.  I still beg to differ.

Being a big believer in moving averages, if I see a stock or Index with rising moving averages, I take it as a sign of buying within a name.  That being said, if I see falling longer term moving averages (100d and 200d), that to me signals trouble; stay away or short any pop.  However when I see longer term MA's flattening.......my curiosity is peaked from a bottom fishing point of view.  My first thought "is the bad news over and is it putting in a bottom?


After writing my February post, I put my money where my mouth was and bought $NAT looking for a reversal out of it's bottom (which it did) and today it absolutely plowed through it's 200d where I banked partial. 

Do I believe that it will hold?  No.  With so many shorts it's certain to be faded *and* as most breakouts test their supports, it will as well.  Will I be adding more on that test?  You betcha.  Do I think it'll shoot back up to the highs?  Hell no and I can't believe you would ask that.  This is definitely a short squeeze and it doesn't bother me one bit.  Shippers definitely face a great deal of headwinds as they attempt to pass on higher prices to their customers however if the majority of the new vessels have been received, if they continue to retire old ones shrinking their fleet and if they've re-negotiated the terms of their (heavy) debt given such lower interest rates, I do not see any reason why the bottom is not truly in.  At the very least, the moving averages will become my support as they continue to flatten with my stop below the January low and a partial already banked.  Yes, like going to an AA meeting, my name is Kos, and I like to bottom fish. 




Read More, Comment and Share......


Light At The End Of The Tunnel For Shippers?

Leading up to the market peak, shippers made the fatal error of buying the boom frenzy and ordering the construction of new ships.  Once credit markets constricted it was too late for shippers to turn back.  By 2009 the dime had been dropped, orders placed, payment promised, they saw a total a total collapse of freight rates; each battling the other for dwindling world wide business (see video)

Many traders believed QE would lift all boats (pun intended) and struggled over and over again to find a bottom in the Baltic Dry Index but to no avail.   Wasn't China going to stockpile again?  For years we had be "programmed" to that belief.  Many simply did not comprehend the impact of world-wide tightening and slowdown, even in China.  Voracious demand did not return and oversupply of vessels meant freight rates continued to see pressure even with the Feds money printing as new ships continued to be delivered.  

Then finally, a glimmer of hope.  Moodys projected that most new ships would be delivered in 2012 or 2013.    Market theory began circulating that maybe, just maybe the end was approaching.   In the meantime, shippers have been on a long road to healing and that's a good thing........for those names who survive and don't find their way to the OTC graveyard.  Record low rates have allowed for credit terms to be renegotiated and M&A may be heating up.  NAT recently completed its acquisition of Scandic American and DSX announced a new loan facility, just to name a few.  I imagine we'll see much more of the same going forward as global economies heal and business prospects improve.  Old vessels continue to be retired/scrapped and with any luck all new deliveries will be completed in due course. 

The glimmer of hope may be a lighthouse with prospects of higher shipping rates coming in May; as much as 50% higher in fact which would be a wonderful development.

From a chartist point of view, 2012 may well have been a year of forming a bottom or basing but only time will tell.

$BDI appears to be supported at these lower levels and there has been talk of Asian interests in shipping names.  I personally have begun to accumulate NAT as a drawer stock and will continue to accumulate going forward.    I will confess quite often I am too early to the party and there remains the chance of more pain to come but if you ask me if shippers are closer to the lighthouse and safe harbors?  I for one truly believe so.


Read More, Comment and Share......

We welcome you to post a blog entry, oped or share your daily reading with us as long as it is relevant to the topic of investing and not an attempt to sell a product, proprietary strategy, platform or other service. Please provide links to any research data and if re-posting other articles, give credit where credit is due providing a back link to the original site.

300 words minimum per post. You may also sort by category or search by topic. Don't forget to comment and please "share" via Facebook, Twitter and Google+. If you have any questions, please contact us.



This is a member-supported site. Please donate when you can to help pay the rent. Thank you!

Stay Informed. Sign up for the FREE StockBuz eNewsletter


Investing involves substantial risk. All content is subject to StockBuz disclaimer.

Create Income With Option Spreads

All content on StockBuz.net is subject to disclaimer and Terms of Service