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March 28, 2019
Published by Kuppy at March 28, 2019
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Reader: …But Kuppy, won’t they build more boats and crush rates? Me: With what money? Shipping is a highly cyclical industry. A boat lasts for two decades but earns most of its money over a handful of quarters—where it often earns truly extraordinary profits. Unfortunately, these earnings incentivize over-ordering and a subsequent glut of vessels for years into the future; destroying charter rates Read More
Categories: Investments
Positions Mentioned: STNG
March 11, 2019
Published by Kuppy at March 11, 2019
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If you had to distill today’s stock market down to one overriding narrative, it would be the flow of capital into consistent growth businesses and away from anything with the slightest hint of cyclicality or earnings volatility. I full subscribe to the market’s belief that a business with steady growth should trade at a premium to the mid-cycle earnings multiple of one with more Read More
Categories: Investments
Positions Mentioned: AR
March 3, 2019
Published by Kuppy at March 3, 2019
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For Part I Click Here This may surprise people, but accounting isn’t a black and white endeavor—there’s actually a lot of gray area—particularly when you deal with accruals and estimates for future events. This is the reason that two very similar companies can report very different short-term results. What is the useful life of equipment from a depreciation standpoint? What is the eventual cost Read More
Categories: Investments
Positions Mentioned: TSLA, TSLAQ
March 1, 2019
Published by Kuppy at March 1, 2019
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All Ponzi schemes follow a basic rule; as long as more money is coming in than out, the scheme can continue to inflate. When money stops flowing in, the scheme collapses—often quite rapidly. I believe that Tesla (TSLAQ – USA) is near the final stages of this arc. Excluding stock option exercises, cash is no longer inbound; meanwhile Tesla can no longer use financial Read More
Categories: Investments
Positions Mentioned: TSLAQ
February 12, 2019
Published by Kuppy at February 12, 2019
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I’m a value investor at heart, so I naturally gravitate towards cheap stocks. That said; companies are often cheap because of well understood problems. The money is made by having a divergent opinion for why things will get better, along with a catalyst—otherwise a cheap stock will stay cheap or even get cheaper. In terms of valuation, there is no question that most US Read More
Categories: Investments
Positions Mentioned: STNG
January 13, 2019
Published by Kuppy at January 13, 2019
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Increased government regulation is a fact of life—particularly in the shipping sector. As a shipping investor, this tends to be good news; as disruption usually upsets existing trade patterns and leads to an increase in charter rates. I learned the benefit of this nearly two decades ago, when single-hull crude carriers were phased out following the Exxon Valdez accident. The resulting shortage of new Read More
Categories: Investments
Positions Mentioned: STNG
January 4, 2019
Published by Kuppy at January 4, 2019
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From time to time, the investment world takes something as accepted wisdom and just runs with it. For whatever reason, investors seem convinced that the US Dollar is destined to go higher. I’ve heard lots of smart opinions why; interest rate differentials, GDP growth rate differentials, “The Dollar Milkshake Theory,” “Prettiest Body in the Morgue” and the “Fear Trade.” Over the past two years, Read More
Categories: Investments
Positions Mentioned: DXY
December 26, 2018
Published by Kuppy at December 26, 2018
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Lots of bloggers have opinions on the stock market. Once a year, we compare returns and see who was right. Fortunately, 2018 was another great year for the home team—particularly due to the timing of my sell everything call on October 11. Let’s look at the positions I’ve spoken about on this site in order of their mention—starting with positions held over from 2017. Read More
Categories: Investments
Positions Mentioned: AIM CN, JYNT, TSLAQ, TOO, TDW, VMD CN, IBR CN, JOE, ESV, NE, SD, AR, GPOR, RRC
December 10, 2018
Published by Kuppy at December 10, 2018
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One of the great ironies during the decade of ZIRP/NIRP and QE, is that while it created plenty of asset price inflation, it created minimal consumer price inflation. I suspect this is because free money brought forward all sorts of unprofitable new supply, creating oversupply in most industries and crushing end-market pricing. Look at shipping for instance, excluding some brief spikes, you’ve had all Read More
Categories: Investments
Positions Mentioned: TDW, ESV, NE, AR, GPOR, RRC, SD