I bought DCIX as a bet on the improving economy. Being older I have been through enough business cycles to know that the economy can surprise on the upside. Have seen shipping rates explode and valuations the same. I am betting that current management is good and are playing the game to the best of their ability. Lots of factors involved. Its and art.
The analyst whose article has caused today's drop seems a little young and may be underestimating just how quickly things can change for the better. He may be in his first cycle. I will bet with current management. All the numbers!!! In the end economics is 99% human psychology.
After the rebound, if it comes, all the positives will again be explained with numbers. And it will make eminent sense. I am a strong buy.
Sentiment: Strong Buy
So how much DD have you guys done?
You believe management, and not the guy from SA, so how about when management says that according to their sources, 2013 will have lousy charter rates and flat ship values, and more ship supply than demand.
How about when management acknowledges that the purchase price of those ships and the charters that were signed were well above market rates.
Your DD should have revealed to you that the Garnett, a 1995 Panamax 4,700 TEU container ship was worth at best $12 million.
So DCIX in effect gives Mearsk a loan for $30 million, and Mearsk pays them back for 34 months at $27,000 per day after which they would pay $7,000 per day until ship is returned. At which point DCIX will own a 20 year old ship worth $9 million for scrap.
And management also said that all ships over 20 years old need to be scrapped.
They also say that this convoluted, over inflated, market deal allows them to pay the dividend. And they will look for newer ships that would be ready for an improved market in 2015.
They didn't say anything about how it allows them inflated commissions.
And inflated book value.
And they didn't say anything about the impairment charge they will take when they sell the ship, it does mess up the depreciation schedule.
You guys read all that when you did your DD, right?
I would love for you to verify and document everything that you wrote in your message post about all of the perils of investing in DCIX. Please tell me the page and paragraphs of the SEC documents that DCIX filed, showing and demonstrating all of the "terrible" fundamentals and financials that you quote. You did all of your due diligence (DD) so this should be quick and easy to re-post on this message board all of the stuff that you wrote.
Seeking Alpha will publish anything from anyone. There is no proof reading or fact checking done by the SA editors. It's reader beware and do your own due diligence.
My money's on the financial results for the fourth quarter to be released on Feb. 19th.
Good luck to all!
DD and "fact checking" is done at SA by follow readers
who challenge the data and the premise of any author
who posts. This is much better than expecting the website
to "fact check"
Mr M wrote a impactful story employing his premise and
data sets regarding DCIX. He also came under intense
scrutiny by many follow readers on many different levels.
The SA author carried out a vigorous defense of his premise
in a fact based, professional manner. Much more so, than
the average "seasoned middle-aged investor" does at the many
investor websites. He should be given credit for his quality
security analysis, whatever his age.
So what if he is young with only a handful of years of experience.
Investors are only limited by their capital and their ability to
ascertain excellent risk adjusted investment decisions. Age is
not an absolute criteria for good investing.
I am not saying his numbers are wrong just that his market experience is mostly this business cycle, since 2006. Look at home building stocks. They go up long before a turn in the market. In the last cycle they went up 400% before any decent "numbers" showed an improvement. If you want to catch the big moves you have to buy when it hurts.
Onassis bought ships in the Great Depression when no one wanted them. He didn't do so bad. Would love to get this analyst's analysis of the Onassis purchases. By his way of thinking Onassis was an idiot. However Onassis became one of the richest humans ever.
Heh, investing is risky and the big money is made taking the biggest "apparent" risk.
I am betting that the world economy will be far better in two years and that the price of shipping stocks will rise substantially long before you can see the light at the end of the tunnel and that DCIX will hit 15 before the end of 2014.
Sentiment: Strong Buy