So quite a few remarkable events have been occurring over here in the UK (although Airdrie has remained practically unmoved by the events I am about to outline for you). Her Majesty Queen Elizabeth II registered her 90th birthday the other day (gawd bless ‘er!). What an achievement that is too. Her tips for longevity? Long holidays, never carry money and have endless privilege and flunkies to do your bidding. Now there’s a shock! I do like the rule about only talking to her if she talks to you, surely the easiest way to win an argument.
As is usual on a Friday, me and the boys were sat round a wobbly table at the Airdrie Working Men’s Club, getting a couple of rounds of Heavy in during the world’s least aptly-named happy hour. Old Zeke was sipping away on his pint when he looked up at us and said ‘Do you know that on average the Queen gets sent two human turds a week in the mail?’ We all registered our disgust through murmurs and grunts. ‘I know, I know’ he said. ‘I’m just wonderin’ who it is that sends her the other one?’ he mused wistfully. Cue utter silence.
The second thing of note over here (but strictly speaking nobody here in Scotland gives a haggis’s hind legs of course) is that Leicester City, a 5000-1 shot won the Premier League football this week. Had you been over here at all then undoubtedly you would have been bombarded with chat about little Leicester City producing the impossible to win the biggest league prize of them all (at least that’s what the sponsors of this particular prize call it). Not since unheralded small town club Nottingham Forest won the same league back in 1978 has this been achieved.
Errr, hold up a minute! So basically, while it is a pretty rare occurrence for a team like Leicester to win the league, are you telling me that this sort of thing has happened before? Well, yes. Of course it has. Not just in England, not just in football, but in plenty of other events, trophies, tournaments and lots of other things besides. For example, would the Danish readers think it impossible for a totally unfancied team lift a major trophy? Or the Greek readers for that matter (who will of course remember the incumbent Leicester manager as the same man who took them to defeat against the mighty Faroe Islands in his previous job).
As much as I love to natter on about my adopted favourite sport, I will try to bring it to a freight-related point. The point is this: I was fortunate enough to be sent a presentation from a well known shipping company the other day. Firstly, I would like to comment that it was visually the single dullest thing I have ever seen. Secondly, while it has all the usual trapping of plausibility of a shipping presentation, it simply didn’t scan. In fact, it was the perfect shipping presentation all round then!
The opening slide was the ubiquitous graph of the average time charter rates from the Baltic. This is then split into some random and arbitrary periods according to whatever conclusion that the Powerpoint is lumbering towards. It’s usually four periods, sometimes three, never actually explained as to why they are chosen. Pick a place, draw a line, write some stuff.
However, what really caught my attention was this: a large red oval drawn around the market of 2008 and next to it, in large angry red letters (in default font of course) it read ‘THIS WILL NEVER HAPPEN AGAIN’. Now that is a bold, bold prediction. And it is statistically entirely incorrect. What is more, it actually only happened eight years ago. Not 30, not 50, not 100. Just eight years ago. It’s not like the market has taken a technical leap forwards. Structurally it is exactly the same as it was then.
It would seem that the power of analysis is better served by taking the greatest statistical show-stopper in the demonstrable history of the market and just say ‘forget it’. First question is why on earth any analyst at a company that owns ships is not dissecting those years, when everyone could make money in shipping, to try to find at least an electrical pulse to indicate what lessons could be taken away from them. No. Better just to say ‘I can’t explain it so let’s just say no more about it. Did I mention China yet? Here are some charts about China.’
How does this loosely relate to the two things previously mentioned that happened in Britain over the past week or so? Let’s look at the Leicester miracle firstly. They nearly got relegated last season, which adds plenty to the story. However, in order to save themselves from relegation when they were considered about as irredeemable as a ticket to a Prince concert, they had to hit form that would have been worthy of champions to avoid relegation. They did it and avoided the drop. So one would think that the question would not have been whether Leicester could play like champions, as they had already proved they could, but whether they could sustain it over a season. They could. They could, just like Nottingham Forest did in 1978. Yep, just like it had been done before. Frankly to suggest that something that has actually already occurred cannot possibly happen again, particularly when nobody truly understands how it happened to the extent that they themselves could not recreate it, well that’s just plain wrong.
Secondly, take note freight forecasters of the world. Now that Leicester have won it gives carte blanche to all manner of ridiculous predictions and forecasts. Here are a couple, 2008 rates will be repeated at some point in the next 30 years. China’s economy will have a soft landing. Tanker rates will stay good for at least the next five years. Actually people are using two of those three already. How about there being a shipping company in the FTSE 100 before 2030? If anybody disagrees (as plainly in theory they could all be nonsense) then just remind them to ‘Look at Leicester’.
The final thing that struck me about the statistics is that of the Queen’s weekly mail. Now, we know that Zeke is one of them, could the other one be sat in your office as you read this? Statistically unlikely, but you cannot say for sure that they are not.