Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
CATHY WOOD ARK GARBAGE ARK Funds Heading for 90% STOCK CRASH! - 22nd Jan 22
Gold Is the Belle of the Ball. Will Its Dance Turn Bearish? - 22nd Jan 22
Best Neighborhoods to Buy Real Estate in San Diego - 22nd Jan 22
Stock Market January PANIC AI Tech Stocks Buying Opp - Trend Forecast 2022 - 21st Jan 21
How to Get Rich in the MetaVerse - 20th Jan 21
Should you Buy Payment Disruptor Stocks in 2022? - 20th Jan 21
2022 the Year of Smart devices, Electric Vehicles, and AI Startups - 20th Jan 21
Oil Markets More Animated by Geopolitics, Supply, and Demand - 20th Jan 21
WARNING - AI STOCK MARKET CRASH / BEAR SWITCH TRIGGERED! - 19th Jan 22
Fake It Till You Make It: Will Silver’s Motto Work on Gold? - 19th Jan 22
Crude Oil Smashing Stocks - 19th Jan 22
US Stagflation: The Global Risk of 2022 - 19th Jan 22
Stock Market Trend Forecast Early 2022 - Tech Growth Value Stocks Rotation - 18th Jan 22
Stock Market Sentiment Speaks: Are We Setting Up For A 'Mini-Crash'? - 18th Jan 22
Mobile Sports Betting is on a rise: Here’s why - 18th Jan 22
Exponential AI Stocks Mega-trend - 17th Jan 22
THE NEXT BITCOIN - 17th Jan 22
Gold Price Predictions for 2022 - 17th Jan 22
How Do Debt Relief Services Work To Reduce The Amount You Owe? - 17th Jan 22
RIVIAN IPO Illustrates We are in the Mother of all Stock Market Bubbles - 16th Jan 22
All Market Eyes on Copper - 16th Jan 22
The US Dollar Had a Slip-Up, but Gold Turned a Blind Eye to It - 16th Jan 22
A Stock Market Top for the Ages - 16th Jan 22
FREETRADE - Stock Investing Platform, the Good, Bad and Ugly Review, Free Shares, Cancelled Orders - 15th Jan 22
WD 14tb My Book External Drive Unboxing, Testing and Benchmark Performance Amazon Buy Review - 15th Jan 22
Toyland Ferris Wheel Birthday Fun at Gulliver's Rother Valley UK Theme Park 2022 - 15th Jan 22
What You Should Know About a TailoredPay High Risk Merchant Account - 15th Jan 22
Best Metaverse Tech Stocks Investing for 2022 and Beyond - 14th Jan 22
Gold Price Lagging Inflation - 14th Jan 22
Get Your Startup Idea Up And Running With These 7 Tips - 14th Jan 22
What Happens When Your Flight Gets Cancelled in the UK? - 14th Jan 22
How to Profit from 2022’s Biggest Trend Reversal - 11th Jan 22
Stock Market Sentiment Speaks: Are We Ready To Drop To 4400SPX? - 11th Jan 22
What's the Role of an Affiliate Marketer? - 11th Jan 22
Essential Things To Know Before You Set Up A Limited Liability Company - 11th Jan 22
NVIDIA THE KING OF THE METAVERSE! - 10th Jan 22
Fiscal and Monetary Cliffs Have Arrived - 10th Jan 22
The Meteoric Rise of Investing in Trading Cards - 10th Jan 22
IBM The REAL Quantum Metaverse STOCK! - 9th Jan 22
WARNING Failing NVME2 M2 SSD Drives Can Prevent Systems From Booting - Corsair MP600 - 9th Jan 22
The Fed’s inflated cake and a ‘quant’ of history - 9th Jan 22
NVME M2 SSD FAILURE WARNING Signs - Corsair MP600 1tb Drive - 9th Jan 22
Meadowhall Sheffield Christmas Lights 2021 Shopping - Before the Switch on - 9th Jan 22
How Does Insurance Work In Europe? Find Out Here - 9th Jan 22
MATTERPORT (MTTR) - DIGITIZING THE REAL WORLD - METAVERSE INVESTING 2022 - 7th Jan 22
Effect of Deflation On The Gold Price - 7th Jan 22
Stock Market 2022 Requires Different Strategies For Traders/Investors - 7th Jan 22
Old Man Winter Will Stimulate Natural Gas and Heating Oil Demand - 7th Jan 22
Is The Lazy Stock Market Bull Strategy Worth Considering? - 7th Jan 22
METAVERSE - NEW LIFE FOR SONY AGEING GAMING GIANT? - 6th Jan 2022
What Elliott Waves Show for Asia Pacific Stock and Financial Markets 2022 - 6th Jan 2022
Why You Should Register Your Company - 6th Jan 2022
4 Ways to Invest in Silver for 2022 - 6th Jan 2022
UNITY (U) - Metaverse Stock Analysis Investing for 2022 and Beyond - 5th Jan 2022
Stock Market Staving Off Risk-Off - 5th Jan 2022
Gold and Silver Still Hungover After New Year’s Eve - 5th Jan 2022
S&P 500 In an Uncharted Territory, But Is Sky the Limit? - 5th Jan 2022

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Huge Investor Opportunity in This "Left for Dead" Stocks Sector

Companies / Sector Analysis Oct 30, 2012 - 09:09 AM GMT

By: DailyWealth

Companies

Best Financial Markets Analysis ArticlePaul Mampilly: John Fredriksen just made the biggest bet of his career...

Just weeks ago, John called the bottom in the shipping industry. He's backing his call by spending $11 billion to add more ships to his fleet. It's the biggest bet he's ever made in an extraordinary career.



John Fredriksen is the largest owner of shipping tankers in history. In 2005, Fredriksen's fleet numbered more than 500 ships. That was eight times larger than that of legendary ship owner Aristotle Onassis.

Forbes magazine estimates Fredriksen's wealth at $10.6 billion, and just last month, Bloomberg Markets magazine named Fredriksen the fifth most influential person in the world.

In other words, John Fredriksen knows shipping... and he knows ship values as well as anyone in the world. I believe buying ships alongside him could produce huge returns in the next few years. Here's why...

Overseas Shipholding Group is the largest oil tanker company in the United States. It owns over 100 ships. It has been in business since 1948. In the last 30 days, its stock price has fallen by more than 80%. And its bonds now trade for less than 35 cents on the dollar. The rumor is, Overseas is about to declare bankruptcy.

Overseas is not the only tanker company with problems.

On July 2, one of Japan's oldest shipping companies, Sanko Steamship, filed for bankruptcy. Sanko has been in business since 1934.

Then two months ago, on August 3, Stephenson Clarke Shipping, Britain's oldest shipping company, filed for bankruptcy. Stephenson has been in business since 1730.

Between 2008 and 2011, 22 shipping companies filed for bankruptcy. This includes General Maritime, the second-largest U.S. owner of oil tankers, which filed for bankruptcy in November 2011.

In the first six months of 2012, shipping companies have laid off 32,877 people, according to the U.S. Bureau of Labor Statistics.

What's causing this depression? It's supply and demand. There are too many ships and not enough demand for shipping services. During the boom years of 2003-2007, shipping companies enjoyed good times... so they ordered a huge amount of new ships. They ordered more than what they needed, in anticipation of growth continuing for a decade. But the credit crisis and resulting recession smashed the shipping industry's hopes. Those new ships have no jobs.

If the ships are not moving cargoes, they don't generate cash. If they don't generate cash, their owners can't pay for fuel and interest, and they go bankrupt.

And that's the situation we have today. Money is fleeing the shipping industry. Banks are retracting their lines of credit to shipping companies. Bankruptcies are soaring, and lease rates have hit rock bottom. And the crisis is crushing the stocks of shipping companies.

For example, from January 2011 to October 2011, Overseas Shipping Group (OSG) went down by 86%. During the same period, Genco Shipping (GNK) went down by 86%, and Excel Maritime (EXM) went down by 93%. Even Frontline (FRO), one of the most successful shipping companies of the past 20 years, didn't escape. Frontline's stock is also down 89%.

When's the best time to invest in a cyclical "boom and bust" industry?

In theory, you should buy at the point of maximum pessimism, because that's when things are cheapest. But in practice, it's very hard to identify that point. It can always get worse.

So the right time to buy is when things go from "bad to less bad." You can identify this point, because things get slightly better. And that's what's happening in the shipping industry. Lease rates have started to rise.

AG-East and AG-West are lease contracts based on shipping routes heading east to Asia and west to the U.S. and Europe that trade like stocks on an exchange.

AG-East has risen by 5.8% off its 2012 low, and AG-West has risen 4.5%, according to Fearnleys, an expert in shipping rates.

The Baltic Dry Index (BDI) is the Dow Jones Industrial Average of the shipping business. The BDI shows the average rate that shippers are paying to ship their goods. This index shows that the level of lease rates made a new seven-year low last month and bounced 32%.

Simultaneously, the Cass Freight Index, which measures the volume and amount spent on freight shipping for U.S. shipments, grew 4.4% in August over the same month a year ago. That's good and a confirmation that the bottom is in and lease rates are now rising.

In short, things have been terrible in the shipping industry for years now. They still are terrible. But there are signs that things are going from bad to less bad. Legendary shipping investors like John Fredriksen are buying right now.

If you're a speculator who looks to buy extremely cheap assets, it's time to start looking for bargains in shippers.

Good investing,

Paul Mampilly

P.S. Investors can buy a shipping fund like the Guggenheim Shipping Fund (SEA), but like any fund, it will hold lots of mediocre companies. At the Palm Beach Letter, we've found the best, safest shipping company in the industry. It has little downside... and lots of upside. When the upturn in shipping arrives, this stock should safely return at least 100% for early investors. You can learn about a risk-free trial subscription to the Palm Beach Letter, along with another very safe way to make great returns, right here.

http://www.dailywealth.com

The DailyWealth Investment Philosophy: In a nutshell, my investment philosophy is this: Buy things of extraordinary value at a time when nobody else wants them. Then sell when people are willing to pay any price. You see, at DailyWealth, we believe most investors take way too much risk. Our mission is to show you how to avoid risky investments, and how to avoid what the average investor is doing. I believe that you can make a lot of money – and do it safely – by simply doing the opposite of what is most popular.

Customer Service: 1-888-261-2693 – Copyright 2011 Stansberry & Associates Investment Research. All Rights Reserved. Protected by copyright laws of the United States and international treaties. This e-letter may only be used pursuant to the subscription agreement and any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), in whole or in part, is strictly prohibited without the express written permission of Stansberry & Associates Investment Research, LLC. 1217 Saint Paul Street, Baltimore MD 21202

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Daily Wealth Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in