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Thanks Boss:Trades w 2 Cats wrote:...If you are curious about oil tankers...
Thanks for the post, and the information. It is very interesting, and honestly, the amount of detail is quite a bit above my level of interest in shipping itself up to this time. I do trade some shipping stocks, but that is based on charts and financial information.Trades w 2 Cats wrote:If you are curious about oil tankers-
They come in several sizes. They come in two colors, regular and grey market. Grey market turn off transponders and transport Russian, Venezuelan and Iranian crude oil. They are about 1/3 of the fleet and mostly run by Greek ship owners. Reasonable people do not invest in Greek ship owners because they treat stock holders very very badly.
Tankers have a service life. At the end they are sold to the scrappers where they are run up on the beach and taken apart. Newer ships meet current environmental standards. Some older ships have been equipped with stack scrubbers allowing them to use the worst grades of fuel. The newest can use LNG for fuel, but those engines are very expensive. By the way there are about 850 Very Large Crude Carriers circling the globe.
Owners can either take long term charters or put their ships in the spot market.
Three recent developments have caused opportunity. The new environmental rules force older ships to use more expensive (less polluting ) fuel. The Covid crisis caused freight rates for container ships to sky rocket. Owners did what they always do and totally filled the ship yards with new container ships. Then the European sections on Russian oil hit changing supply lines and voyage lengths. Thus, there are essentially no new tankers for several years.
John Fredriksen the shipping king, and others have gone to a business model where they pay out profits in dividends to share holders, not bonuses to management. Current used values are important because tanker companies are priced compared to the current net value of their fleet.
Tankers are usually a bad investment. Because when times are good they over order and then spend years at break even operating or even below operating. But like an ice cream store on a hot summer, when things are right they make a huge amount of money.
Many think that is what is happening right now as we are in a new three or four year supercycle. Or not!
Why take your precious time to learn about an investment that is usually a loser. Well, if the experts are correct where else can you buy for less than net asset value and be looking at a possible dividend return of 15%. Also many have share holder meetings in Bermuda if you want to explain that write off to an IRS auditor.
Great post. BB52. You've got it covered. Longer term, swing trades and intraday. You continue to inspire me, as you have for years.BullBear52x wrote:From "It is what it is department" Market is topping and turning south, price drop below 5 DMA. What is your time frame of a trade? Daily trend following = Buy dips; Swing = Sell rips; intraday = Sell rips. simplify!