Every so often I read something that makes me wonder why oh why oh why anybody says it with a straight face. And why oh why oh why oh why anybody would print it for mass(ish) consumption. So I am going to start a taxation plan, which will charge a fee in bananas for those prone to spouting nonsense. One banana is a bit silly, the more bananas you have to pay for, the more dim your ideas are viewed. So . . . read this one, which I have helpfully annotated until you get the hang of it. At the bottom you will see the Banana Tax rating:
QUOTE The time is ripe for opportunistic buys in dry bulk, where risks taken now are likely be rewarded with respectable returns for “patient capital”. So believes Rahul Kapoor of Drewry Maritime Equity Research, who was speaking at the first Capital Link China Shipping Forum, held in Shanghai.
SO IF I HANG ON FOR LONG ENOUGH THEN ONE DAY I MIGHT MAKE A MODERATE RETURN? WOW! WHERE DO I SIGN UP FOR THIS?
In a survey of the main shipping markets and their outlook, Kapoor said Drewry sees energy shipping trades as remaining the more profitable ones to operate in, and sees little to justify investment in container tonnage, but in dry bulk it sees an opportune moment for secondhand buys because of dramatically depressed prices.
SOMEBODY ACTUALLY TOOK TIME TO PUT THIS INTO A PRESENTATION AND READ IT OUT? AND SOMEBODY TOOK TIME TO SIT THROUGH IT AND LISTEN? THEN SOMEBODY WROTE AN ARTICLE ABOUT IT? AND SOMEBODY EDITED IT? THEN SOMEBODY PRINTED IT? THEN I READ IT? THE MAN HOURS WASTED BY THE ABOVE STATEMENT SHOULD BE CHARGED AT THE HIGHEST TAXABLE RATE.
The Drewry secondhand dry bulk price index has slumped by 38.4% since January 2015.
THAT’S NOT EXACTLY THE ‘BUY’ SIGNAL ATTRIBUTED TO ANY MARKET IN THE WORLD.
Kapoor’s models predict a five-year panamax investment this year would produce an internal rate of return of 16% between now and 2020, and a similarly timed capesize play would bring 12%.
IT MUST BE TRUE BECAUSE HE HAS A MODEL. PITY THAT IT IS A CLAY MODEL OF A BIFFA BIN.
Kapoor believes recent “smart money” plays by John Fredriksen, Andreas Sohmen-Pao’s BW Group and Nikolas Martinos’s Thenamaris point in the same direction as Drewry’s numbers.
QUICK QUESTION: IF YOU READ THE PARAGRAPH ABOVE THIS, KAPOOR’S MODEL PREDICTS 12% RETURN FOR CAPES, BUT 16% RETURN FOR PANAMAXES. BUT ALL OF THE ‘SMART MONEY’ BOUGHT CAPES? I AM CONFUSED ABOUT THE ‘SMART’ PART OF THIS.
Buying the steel beats buying shares as a bet on dry-bulk recovery.
HE ASSUMES THAT THIS IS CORRECT, AND HE ALSO ASSUMES THAT YOU WILL ASSUME IT IS CORRECT, BUT TECHNICALLY HE IS ANSWERING A QUESTION THAT ISN’T BEING ASKED. AND IF IT WAS, THEN THE PERSON ASKING IT WOULD BE FINED SEVERAL BANANAS FOR BEING AN IDIOT.
“Investors who want to defensively play the dry bulk market can look to invest in physical assets as they would offer more certain and gradual return compared to stocks,” Kapoor told the Capital Link crowd. UNQUOTE
SORRY – THAT LAST PARAGRAPH DEFIES EVEN MY WITHERING WRATH FOR HOT AIR. NOT ONE SINGLE SHRED OF FACT IN THAT ONE. IN FACT QUITE A LONG AND PROVEN CASE FOR THE DIAMETRIC OPPOSITE BEING TRUE. I AM GOING TO GIVE MR KAPOOR A CRUMB OF SYMPATHY THAT THIS LOOKS A BIT QUOTED OUT OF CONTEXT. BUT THE JOURNALIST WHO WROTE IT SHOULD BE STRUNG UP BY HIS BANANA.