I was just reading a MF article on GNK, it had a link to their GNK discussion page, and I stumbled upon this gem of information which may make me rethink my recent decision to move out of GNK and into GLNG:
"The Panama Canal is undergoing a massive expansion which should double its capacity. The Canal upgrade is scheduled to be complete in 2014. My guess is the folks at GNK know this, and that is why they have been purchasing mainly jumbo vessels. Jumbo vessels are the vessels that will benefit most from the Canals' expansion, because now, the jumbo vessels cannot get through the canal. However, once the Canal expands, this will make shipping on these type of vessels more attractive. Essentially GNK is gobbling up large jumbo vessels cheap when the conventional wisdom is that these vessels are not economical, knowing that in 2014, these vessels will be much more valuable after the Canals' expansion"
So if you/we/I can handle what looks to be some short term pain (ok, 2-3 yrs ain't exactly a short term), it looks like GNK will EXPLODE in 2014, if not before then. Still think we go down lower in 2011, how much is anyone's guess....but if the P/E stays at the current 3.37 and the analysts are correct about 2011 earnings being ~ $2.74, we could be looking at a $9-$10 stock here.....back to the 2008-2009 levels where I luckily purchased most of my shares (although a string of swing trades has raised my basis up to $11.5, I still have a bit of a comfort margin against steep drop in the pps).
Speaking of the BDI cratering, anyone know why the data on
hasn't been updated since Dec 24th? Any other web site that gives a nice short BDI summary like the Dryships page?
I just came back from Shanghai, my birth place. The housing bubble there is 5 times more than the one we have experienced in the US in 2006. When an apartment in Shanghai in as expensive as in SF or Manhattan, when an average citizen there is making 1/10 of a US citizen, you know how things will get bad there
The difference in China is that people buy house with 50% down or cash, as government has knowingly shifted the risk to its citizens by requiring very high down payment to avoid the subprime loans. As a result, when the bubble burst, it will take a different form as we have seen here in the US. Maybe a demand side recession as opposed to the financial recession? In any case, it will be bad
Shipping stocks will be a real bargain then