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Star Bulk Carriers Corp. Message Board

  • h5n1eric h5n1eric Feb 18, 2012 7:46 PM Flag

    Here's the strategy >>>>

    As you know, I'm looking at the shippers much like the REITS, back in 2009...I think it can be dangerous, but if you "spread the bets"...get a lot of them...weight them the same... the winners should more than pay for any losers, IMO >>>

    STRATEGY ...Take 20% or so, of your portfolio, and spread it among quite a few of them. I used to have 20 in all, but I sold 2, it's 18 for now (but I have an eye on some others I've yet to buy).

    So, say you have $200,000 in your portfolio....Take $40,000....put it (equally divided) into at least 10 of them...I'd recommed 16 - 20 or more, myself....and then PUT THEM AWAY FOR LIFE...and don't go looking at them...just lock em' up !

    Here's the list of 18 shippers I'm in right now >>

    BALT / DAC / DHT / DRYS / DSX / EGLE / EXM / ESEA / FRO / NAT / NM / NMM / OSG / PRGN / SB / SBLK / SSW / TNK / TNP ...and a few more I don't currently own would be SFL / GNK / DCIX / ISH ...

    SO, THERE'S 22 TO CHOOSE FROM (If you had the money, I'd get ALL 22...$2,000 each = $44,000 )....lock em' up !! go on a cruise for 18 months...and then return and check em' out...Frankly, I'd hold the winners for life, as the divys later, based on today's buy-in prices, will be a nice cash flow within your portfolio. GOOD LUCK...

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    • Suggestion: Mathematically, 90% of the benefit of diversification is achieved at 8 positions with 100% achieved at 20 positions... not much gained for the extra 12 positions... Thus, you should consider doing some research that will enable you to rank the 20 positions on some metrics that you value, such as strong balance sheet or week one, or newer fleet or older one, or perhaps, look at the cash flow, EPS, etc, and then pick the top 8... This gets you the diversification while lets you eliminate the obvious weaker companies... If you find 10 "good prospects" then you could buy just those... It seems like that will increase your overall returns rather than the simple strategy that you proposed that ignores any weaknesses or negatives you know about the companies... why buy the ones you rank as "bad" or weaker prospects???

    • Wouldn't it be easier just to invest in SEA?

    • The more realistic strategy is to pick 5 top choices and do it your way.
      My picks are: DHT, SBLK, TNK, PRGN, EGLE.
      Good luck.

    • Oh, take an example (I'll probably get torn apart posting this...but what the heck...they used to tear me apart when I was doing this with the REITS in 2009) >>

      Buy the 20 "shippers" for $40,000...$2k in each one....(out of a theoretical $200k portfolio = 20% of your total portfolio, in play...conservative.)

      After 18 months, you find out that 6 went BK or reorganized, and shareholders got 'cut out'...100% losses. And say the other 14 'survived' / shareholders intact...and eventually RISE 300%, from current levels(and no, I do not think that's absurd, from these levels...just like the REITS back in 2009)....

      So,...take 2 of the 300% winners and 'net out' the 6, 100% losers...You're left with 12, 300% winners ...So....ahhh...the 12 you have left cost $24k to buy....and those rise 300% (that's the gravy)...I think if you do the math, you'll find that those 12 will provide your overall portfolio with a pretty good %age boost (for only having 20% of your money in 'play')

      Some might want to go with less of a %age...some may want to go with more...depends on your 'tolerance'...and fortitude (thru the ups and downs)...But at my age, I like 20% of my funds spread out over about 20 stocks (yeah, currently, I have 18...but I'll try to add a couple round numbers.) more football...the Padres stink... and now they're not even gonna show them on TV for free and (basketball / hockey are 'out')...what's left !! gosh...boring...

      HAVE A GOOD WEEKEND...I may be back from time to time...but I gotta give it a rest...I do wish you luck in whatever investing decisions you make this's a hobby !! Might be interesting in a couple years, reading how you did (or did not do...hmmm... well, 'risk / reward' decide)

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