Maritime Economics - Martin Stopford

[Saluki]

Since I don't have a background in Shipping, I had to read several books to get comfortable enough to put some money to work and not be one of the "tourists" that gets scalped.  Besides the excellent "Shipping Man" by trilogy and The Business of Shipping, a textbook by Breskin, I read Dynasties of the Sea, which has biographies of some of the CEOs of the largest companies. 

 

However, this book was recommended to me by @Packer16 when we chatted at the Berkshire AGM.  I had heard of the book, but said that I didn't want to read another 800 pages, but he insisted it was worth the read. I have to say he was correct.  It's very detailed with information on shipping cycles and prices, formulas and charts that you won't be able to find anywhere. The long view is definitely necessary to understand what is going on.   

 

In the same way that you can do fine in investing with reading Security Analysis by Ben Graham, you can do fine without this book, but like Security Analysis it will separate the pros from the tourists. 

 

The hardcover was $200 and the softcover was $100, but because I'm a deep value guy at heart, I picked up a used copy of the prior edition for $10. I don't think much changes in shipping, and since it covers shipping from the time of sails and the transition to steam power, I think it's got most of what I needed. If there is ever a third edition, it will probably cover the period in 2020 where ships were used as floating oil storage and the new vessels to install offshore wind turbines, or new green fuel vessels, but 90% of what you need is what never changes (fleet size, order book, spot vs contract, financing, etc).

 

Highly recommend if you are interested in shipping as an investment, but for most people shipping is a terrible business so stay away  

[Jaygo]

I just finished “the box”this evening. My takeaway is it is as tough an industry as any and twice as capital intensive and cyclical. 
 

An excellent book by the way as well. 
 

what is your investment interest in shipping if I may ask. 

[Saluki]

@Jaygo I have a medium sized position in STNG and I had a medium, now small, position in NETI (I sold half). I had been jumping in and out of few where I saw it was cheap, but I'm currently looking for things that have a moat like Offhsore WInd (NETI) where you can keep compounding and not face new entrants or more ship building like drybulk or tankers.  I have a very small position now in KNOP (shuttle tankers) and SFL, which has long term contracts in a little bit of everything, but is increasing it's Ro-Ro fleet. The business model of SFL reminds me of what Sokol was doing with ATCO.  Roll-on-Roll off is an oligopoly, but the Ro-Ro only companies are expensive, and it's one of those specialty things which I hope is not wide open to new entrants.  KNOP is an oligopoly with Teekay, and Shuttle Tankers can work work as crude tankers in a pinch, but not vice versa, which I hope will make them more resilient. I'm still digging into KNOP and SFL and I like what I see so far, and may add more, but it's a small position for know while I study them. 

[Seoshin]

On 9/28/2023 at 12:17 AM, Saluki said:

@Jaygo I have a medium sized position in STNG and I had a medium, now small, position in NETI (I sold half). I had been jumping in and out of few where I saw it was cheap, but I'm currently looking for things that have a moat like Offhsore WInd (NETI) where you can keep compounding and not face new entrants or more ship building like drybulk or tankers.  I have a very small position now in KNOP (shuttle tankers) and SFL, which has long term contracts in a little bit of everything, but is increasing it's Ro-Ro fleet. The business model of SFL reminds me of what Sokol was doing with ATCO.  Roll-on-Roll off is an oligopoly, but the Ro-Ro only companies are expensive, and it's one of those specialty things which I hope is not wide open to new entrants.  KNOP is an oligopoly with Teekay, and Shuttle Tankers can work work as crude tankers in a pinch, but not vice versa, which I hope will make them more resilient. I'm still digging into KNOP and SFL and I like what I see so far, and may add more, but it's a small position for know while I study them. 

I praise your interest in the shipping industry. I work on this industry myself and have sailed to a plethora of ships including tankers and shuttle tankers. I'm currently on offshore wind and NETI is a good one I must say. However, I don't invest in this industry to avoid concentration risk. 

[DooDiligence]

On 10/2/2023 at 11:37 PM, Seoshin said:

I praise your interest in the shipping industry. I work on this industry myself and have sailed to a plethora of ships including tankers and shuttle tankers. I'm currently on offshore wind and NETI is a good one I must say. However, I don't invest in this industry to avoid concentration risk. 

 

Another (former O & G) mariner here!

 

Everyone's getting into the action with offshore wind.

 

http://www.chouest.com/press/windfarm-service-operation-vessel.html

Edited October 5, 2023 by DooDiligence

[Seoshin]

On 10/5/2023 at 9:00 PM, DooDiligence said:

 

Another (former O & G) mariner here!

 

Everyone's getting into the action with offshore wind.

 

http://www.chouest.com/press/windfarm-service-operation-vessel.html

Oh my. May I know which fleet you sailed in good sir?

I can see this action personally myself. Currently we are laying cables for the Doggerbank wind farm and NNG wind farm off the coast of UK. These green subsidies are too good to pass for these peeps.

[Morgan]

@Saluki Just to confirm this is the correct book for Dynasties of Sea?  

 

Dynasties of the Sea: The Shipowners and Financiers Who Expanded the Era of Free Trade by Lori Ann Larocco from 2012

 

It has a blurb on the cover form Donald Trump? 

 

There is also a second edition from 2018 that covers PE/hedge funds entrance into the industry. 

 

[DooDiligence]

19 hours ago, Seoshin said:

Oh my. May I know which fleet you sailed in good sir?

I can see this action personally myself. Currently we are laying cables for the Doggerbank wind farm and NNG wind farm off the coast of UK. These green subsidies are too good to pass for these peeps.

 

I ran PSV's, OSRV's and AHTV's in support of oil and gas in various locations. The last company I worked for was Chouest in W. Africa and Brasil (loved it) and when oil crashed I went back to the Gulf of Mexico (hated it). I'm retired now. I never worked in the North Sea but am familiar with the weather conditions and have great admiration for anyone who can endure it.

[Seoshin]

15 hours ago, DooDiligence said:

 

I ran PSV's, OSRV's and AHTV's in support of oil and gas in various locations. The last company I worked for was Chouest in W. Africa and Brasil (loved it) and when oil crashed I went back to the Gulf of Mexico (hated it). I'm retired now. I never worked in the North Sea but am familiar with the weather conditions and have great admiration for anyone who can endure it.

Dang. You're experienced in the offshore industry. That's amazing. Tbh quite rare to see a seafarer investing personally in the stock market and that's admirable already. Not familiar with Chouest but I've been to Brasil last year serving Petrobas and loved the place! 

I spent too many years in the North sea that a bad weather and a roll of constant 6-10 degrees is normal hahaha thank you!

[Saluki]

On 10/8/2023 at 4:10 PM, Morgan said:

@Saluki Just to confirm this is the correct book for Dynasties of Sea?  

 

Dynasties of the Sea: The Shipowners and Financiers Who Expanded the Era of Free Trade by Lori Ann Larocco from 2012

 

It has a blurb on the cover form Donald Trump? 

 

There is also a second edition from 2018 that covers PE/hedge funds entrance into the industry. 

 

 

@Morgan yes, that's the one. It had profiles in there of people from Seaspan, Scorpio, Frontline, and some of the other major companies, so it's a good one to get a feel for some of the players and their different strategies. 

[Morgan]

3 hours ago, Saluki said:

 

@Morgan yes, that's the one. It had profiles in there of people from Seaspan, Scorpio, Frontline, and some of the other major companies, so it's a good one to get a feel for some of the players and their different strategies. 

 

Gotcha. Thanks for confirming. Kind of jarring to see a Trump blurb on there. 2012 was a different time in politics... 

[Morgan]

Ordered Dynasties of the Sea, 2nd Edition. Looking forward to it. Thanks for recommending! 

[[email protected]]

Looks like there's a free PDF version pasted on google. I'll paste it here but it was on the first page when I searched the title

9ce547df-a3e1-493c-a4a3-0ebbfe0669b9.pdf

[Xerxes]

On 10/8/2023 at 4:10 PM, Morgan said:

@Saluki Just to confirm this is the correct book for Dynasties of Sea?  

 

Dynasties of the Sea: The Shipowners and Financiers Who Expanded the Era of Free Trade by Lori Ann Larocco from 2012

 

It has a blurb on the cover form Donald Trump? 

 

There is also a second edition from 2018 that covers PE/hedge funds entrance into the industry. 

 

did Donal Trump really read A book here … or did he just like the cover page. 

[DooDiligence]

51 minutes ago, Xerxes said:

did Donal Trump really read A book here … or did he just like the cover page. 

 

Audiotape Appears to Prove Trump Capable of Reading

[Morgan]

19 hours ago, DooDiligence said:

 

Audiotape Appears to Prove Trump Capable of Reading

LOL