I'd like to share some thoughts about #tankers $EURN $STNG $FRO $DHT $TNK $INSW $ASC $TRMD $OET & the market in general.
It's counter-productive at best & delusional at worst to guide your investment decisions (I'm not talking about short-term trading) based on the market 1/n
It's counter-productive at best & delusional at worst to guide your investment decisions (I'm not talking about short-term trading) based on the market 1/n
whose inefficiency you seek to exploit.
Either you see a market inefficiency and move to exploit it or the market is pricing the asset efficiently and thus you move on (or accept market results).
From a short-term trading perspective things are different. You seek to 2/n
Either you see a market inefficiency and move to exploit it or the market is pricing the asset efficiently and thus you move on (or accept market results).
From a short-term trading perspective things are different. You seek to 2/n
ride the market's ups & downs & thus you must constantly be tuned to the market's fluctuations & try to see what comes next.
If you're investing, volatility isn't risk. Your risks lie on business performance.
You buy what you think the market will like in a year or more 3/n
If you're investing, volatility isn't risk. Your risks lie on business performance.
You buy what you think the market will like in a year or more 3/n
If you're trading, volatility is a real risk as the stock may move against you and force you to incur losses.
Thus you're constantly focused on what drives the market in the short-term.
You seek to correctly predict where the stock is going in the next week/month/quarter. 4/n
Thus you're constantly focused on what drives the market in the short-term.
You seek to correctly predict where the stock is going in the next week/month/quarter. 4/n
Before you enter a position you should know if it is a trade or an investment.
For example, in April, 2019 I bought $STNG shares at $20 believing that the low levels of forward ship supply will create a very profitable environment for the business for the next 2-3 years. 5/n
For example, in April, 2019 I bought $STNG shares at $20 believing that the low levels of forward ship supply will create a very profitable environment for the business for the next 2-3 years. 5/n
I also believed that #IMO2020 may act as a catalyst for the market to embrace my thesis.
IMO2020 happened and thearlet seemed to agree. Then Covid19 came & brought some unexpected short-term profits due to contango.
Did any of these events affected my thesis?
No. 6/n
IMO2020 happened and thearlet seemed to agree. Then Covid19 came & brought some unexpected short-term profits due to contango.
Did any of these events affected my thesis?
No. 6/n
What they did was to alter the market's perception of the company I'm invested in.
Business-wise $STNG has benefited enormously so far and it's business risk has declined as they generated ample cash to ride safely whatever the market throws at the them for quite some time. 7/n
Business-wise $STNG has benefited enormously so far and it's business risk has declined as they generated ample cash to ride safely whatever the market throws at the them for quite some time. 7/n
If $STNG was a trade for me my perspective would be different. I would have probably sold when I would have hit either a profit-taking price level or a stop-loss one. Or the time limit I may had on it working.
I still see low ship supply ahead for quite some time. The fall 8/n
I still see low ship supply ahead for quite some time. The fall 8/n
in demand is temporary I'm my opinion as covid19 is not a big enough shock for humanity to sacrifice its economic future.
It may sound cynical but historically speaking the cost in lives is not big enough to affect anything else but marginal and/or short-term changes in 9/n
It may sound cynical but historically speaking the cost in lives is not big enough to affect anything else but marginal and/or short-term changes in 9/n
behavior. We who live in the so called developed world are shocked about this simply because we have a really long time to deal with something tough at this scale.
But for the developing world, war and disease is a frequent occurrence or even a constant in people's lives. 10/n
But for the developing world, war and disease is a frequent occurrence or even a constant in people's lives. 10/n
They are the true gauge of how behavior will be affected.
I don't see how any society will accept a second lockdown and potential impoverishment over the deaths of mostly ederly ppl no matter how tragic it might be.
And if you think societies cannot withstand such deaths 11/n
I don't see how any society will accept a second lockdown and potential impoverishment over the deaths of mostly ederly ppl no matter how tragic it might be.
And if you think societies cannot withstand such deaths 11/n
just look how many young people are lost yearly due to accidents & crime.
What I'm trying to say here is that ultimately life goes on and along with it oil consumption.
And although we may see oil demand stabilize a few % points below 2019 levels, ultimately ship supply 13/n
What I'm trying to say here is that ultimately life goes on and along with it oil consumption.
And although we may see oil demand stabilize a few % points below 2019 levels, ultimately ship supply 13/n
is far more important in predicting how tanker rates will go going forward.
And as far as I see it tankers have a bright and very profitable future ahead.
And my belief is that sooner or later the stock market will price this in.
Thank you for your patience.
And as far as I see it tankers have a bright and very profitable future ahead.
And my belief is that sooner or later the stock market will price this in.
Thank you for your patience.
