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Ship Finance International Limited Message Board

  • s_ralsten s_ralsten Jul 14, 2010 2:12 PM Flag

    Baltic Dry Index

    Anyone else notice how its collapsing ? It was pushing against 4000 a couple months ago, now down to 1709.
    Anyone else worried ? Not just about SFL but about what this indicates to economic recovery falling apart ?


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    • Board member...I did not really want to get into this but Investopedia is "just plain wrong" on some of this about MLP's....! For the short answer listen to me...for the long answer go to different message boards on MLP's around tax time (April) and read different messages from other investors...! i.e. Investopedia says not to own MLP's in a IRA or 401 K because of UBTI...First, Unrealated Business Taxable income (UBTI) and distributions are two different things (most MLP's have negative UBIT and it has to exceed $1000.00)...! Second, many investors have owned and sold them for many years without any problems (has anybody on this board ever heard of depreciation?...)...! Always listen to people that have their money on the line...and not the Pro's that make a living telling a different story all the time...! I am also wrong sometimes...but if I am right 60% of the time I should make good money...this year I have been right about 80% of the time (on my holdings)...! Good luck to all...!

    • Steve...One more thing that I forgot to mention, some of the REIT's that I talked about in previous messages to you have carry-over unpaid dividends...! REIT's by law do not pay any taxes as long as they return 90% or more of their profits to the shareholders...because of that, sometimes they true-up the unpaid profits in a add on to the dividend at the end of the year (or at other points in time)...! It is not uncommon to get a much higher dividend, added to the regular dividend (to true-up their taxable percentage in a shareholder payout)...! Again, I hope this information gives you and some others board members more insight...!

    • Board members...For the record, I don't think much of "Book Value", because except for cash on hand and outstanding debt, it is always just somebody's opinion...! I never buy a stock based on "Book Value"...!

    • thanks for the information. I'm looking at CLMT which has a nice dividend.

    • <<Anyone else worried ? Not just about SFL but about what this indicates to economic recovery falling apart ?>>

      Spot iron ore prices have dropped dramatically. It all reflects reductions in Chinese ore/coal imports, potentially related to a reduction in internal subsidies. With China such a large exporter of manufactured goods, reductions in their imports of raw materials do suggest a future slowing, but container traffic has been increasing at the same time as dry bulk has been declining. China's steel-related imports are so huge that even a small decrease or delay can have a dramatic effect on shipping tariffs. I interpret it as yet another sign that "recovery" is a strong word to use for the current economy. "Flat" probably more appropriate right now.

      For SFL, probably not a big deal, because dry bulk makes up such a small portion of the fleet.

    • Steve...After studying the BDI charts I strongly agree with you...the BDI charts are a leading indicator...! New built ships that are not yet on contract would be a great indicator of current conditions...! Shipping companies with previous long term contracts would not be affected near as much (CNBC is also correct about the BDI on new built ships)...! Thanks again, I been investing over 45 years and you gave the "Old Fox" something new to think about...!

    • S_ralsten...Yes I have notice the drop in the index...! My opinion, it could weaken the price of SFL a little bit but would have very little affect on earnings of SFL...SFL leases ships out and will get the same amount of cash regardless of the daily rates...! That said, if the Index stays down long term it could hurt a bit on SFL's over-ride payments (profit sharing)...??? My opinion, on the economic recovery is that it have been so poor that it cannot fall apart very much...the economic recovery seems to be moving sideways at this time...!

      • 1 Reply to staggman99
      • Board members...First, I do not disagree with Steve as he did make some strong points...! Second, because I am worried about the future of the markets at this time; in the last few days I have been putting in some stop loss orders (plus selling two poor performing holdings)...! My opinion, most of the time the markets trend to trail down from August until the end of October (even in a good year)...! At this time I am putting my portfolio in the safe mode...!

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