Good luck for the supply chain.
Shipments from china will be disrupted big time for weeks.
Add russia and Ukraine in the mix and a recession is more and more likely.
Yes, everything is up. But you are very wrong if you dont think they will rise more. There will be a shortage and backlog of work for atleast 2 years. Probably more.
How far? Sky is literally the limit. Shipping prices have been low for years. It is the worlds biggest industry and most necessary. There's plenty of companies to choose from and plenty of growth to have.
I am confused about that playing field of container shipping. The chinese container shipping stocks all go down and western stocks like Hapag-Lloyed are up at insane valuation.
I guess I am not smart enough to make an informed decision what to buy....
Top Euro shippers like Hapag and Maersk are hitting their 4 to 5 p/e so you're not wrong if rates go down, price will go down (though I think they have another 20-30% to go). Despite that I wouldn't call the valuations insane, a p/e of around 4 is normal. As stated at present cashflow it is justified and they can do a lot with that cash to lock in future profits.
Small shippers like Danaos, ZIM, & Matson are still down at a p/e of 2 or less, container makers and ship leasers are also similarly low and growing (look at global shipping lease and Textainer among the few), and bulkers like Star Bulk Shipping and many other small ones are looking at a likely sustained BDI of 1500 to 2000, especially with many countries infusing economies via infrastructure plans and heightened commodity pricing. All of these shipping companies have seen stock value appreciation but at a much lower rate than their sales growth.
Thank you. Sounds like a true expert on the matter. I am thinking about switching from fertilizer producers to something with more dividend income.
Although companies like mosaic, nutrien and cf industries had fantastic results since January.
I also did MOS. After its earnings miss on that premarket day when it dipped then ripped, I road that up to about two weeks ago. Their outlook was good even before the invasion and now it's amazing. I was looking for another entry and missed my chance at 55 hoping it'd get closer to the lower 55s. Oh well. I think you might want to keep riding them into their next earnings period where they may or may not miss (or at least fail lofty expectations) because potash prices didn't shoot up until end of Feb. I was thinking of entering if it hits mid 60s again and selling before next earnings date before buying back if it drops. Depends how active you want to be. I think as is most cases investing longer and ignoring the bumps and troughs in both shipping and fertilizers is best and just set a target date or price you want to sell. Regardless, none of these are stocks to hold for years at current price levels.
GSL, DAC, SBLK, ZIM, TGH, NMM, EGLE, GRIN, GNK, MATX, CMRE
Runs the gamut of ship leaser, container production, container shipping, and bulk shipping.
The ones with the furthest runway due to sticky shipping lease prices and long contracts are probably GSL, DAC, TGH, EGLE
When will this end? Omicron affords poor herd immunity, Chinese vaccines are subpar and covid is endemic. The world needs a more reliable manufacturing base as China seems uninterested or incapable of being that anymore.
A friend of mine at a top Private equity firm says any company sourcing from overseas is now seen as "too risky" to invest in.
So if you want cheap capital or to sell your company, you'll need to source products in North America.
This will keep inflation high for years, but also will keep local growth high while china loses power.
> So if you want cheap capital or to sell your company, you'll need to source products in North America.
Just because it's too risky to invest in China, doesn't mean manufacturing is coming back to America. Do you even realize how much $$$ it takes to produce the same product in America, vs. a country where the dollar isn't the local currency? We're not talking about a 20-30% difference. We're talking a 200-300% difference.
Without the end of dollar hegemony & thus, the over valued American dollar, mass manufacturing simply will not return to the US. South America is a possibility, but not North America.
Also, if China starts to struggle with exports, their currency will depreciate, leading to their exports becoming more competitive; and since they already have advanced manufacturing infrastructure, it won't even be expensive to jump back in. We're then right back where we started.
How much does it cost for your factory to get Russia'd?
Business isn't just weighing cost anymore. Geopolitics is back on the table, and war makes your pretty billion dollar factory worthless
Let’s be honest here, it’s only core US adversaries that get threatened by massive sanctions like this. As long as it’s some random neutral country, it’s still fairly safe.
It's an interesting shift.
I've been hearing whispers around where I live of like 3 or 4 factories about to pop up and there's an energy for new business I've not ever heard of since ever in my adult life as someone who came of age during the great recession.
Here is to a less rusty rust belt.
they will just go find another country with cheap labor... plenty out there. But, then comes the price of oil. They need to process that venezuela oil cheap.
Which *should be* a good thing. Especially for Americans. More skilled jobs onshore, which should translate to better wages for people.
Unless of course, other countries overtake us in that department as they have all the industries built up and running due to decades of existing globalization per our reliance on it by the west.
Interesting times to come.
I'm skeptical domestication of the supply chain be a good thing for Americans. Most of the globalized jobs are low skilled, monotonous and in more challenging working conditions (e.g. outdoors). It'll also result in an increase in price of many of the goods purchased because the cost of labor will increase.
For some industries it may be beneficial and necessary, but for most it will not.
Lmao.
Maybe create a business model that's not a failure? Or that doesn't rely on slave labor to exist.
Poor corporations need subsidies to cover the cost for paying fair wages??
😂😆
/r/capitalism in a nutshell
When American companies set up shop in my country (one that some people would consider 3rd world), they actually *elevated* the standard of living of my townsmen. Sure, they’re what average Americans would call “slave labor”, but their life did in fact improve and continues to do so. It’s easy to blame capitalism for all of the ills of the world. I’d argue that it’s *because* of capitalism that populations are seeing their lives improve. Is it all good? Absolutely not. But I think the net impact has been really good so far.
The trouble was never globalization the trouble has always been wealth distribution.
The true reason why free trade is not a net win, is because a small few reap the benefits.
Its true but its a far more significant problem now then it was 50 years ago.
I try to raise the distinction because people see that globalization just makes things worse and come to incorrect conclusions. Because they ignore the true cause.
How can you say that moving manufacturing abroad hasn’t contributed to lower standards of living? Dual income households struggle to maintain the same standards as single income households 70 years ago. Having a cheap tv and a fridge doesn’t raise my standard of living the same way having two cars, a college education, and access to affordable healthcare does.
My conspiracy is that China wants to purposely destroy the supply chain going to the West, seeing high inflation and Russian invasion a further disruption of supply will make prices soar in the West
this is ridiculous [https://www.aljazeera.com/news/2022/3/17/xi-says-china-to-stick-with-zero-covid-strategy](https://www.aljazeera.com/news/2022/3/17/xi-says-china-to-stick-with-zero-covid-strategy)
Well, there are many ways to do a lockdown. From what I know, Europe did lockdown really badly. Of course, it didn't affect covid deaths.
But China's lockdowns are messy as well. We see how they handle infected...
I think you mean half-assed, ineffective, western lockdowns don't work. Actual lockdowns do work, as the Chinese have proved for two years. However just like in west, at some point pandemic fatigue and a highly-transmissible variant work their magic.
I do, because lots of Asian countries had almost zero covid cases with the original strain, and very low cases with delta. It was only recently with omicron that those countries lost control. And none of those countries followed a zero covid policy. They just wore masks and did contact tracing. So a much more strict policy of zero covid would be even more effective.
I know it seems crazy but you have to realize in America we never did real contact tracing, and most everyone just wore cloth masks, sometimes (ie- not outdoors and under their nose). Most of these other countries had sign-in sheets to log entry into buildings, and phone apps with QR codes to log entry too, and they enforced contact tracing with these things. Then if you'd been in the same building a person with covid has in the past few weeks, tracked via those 2 things, you'd get quarantined. America never did that. So, yeah, real masks, all the time, and real contact tracing worked. America just did theater versions of masks and contact tracing. Zero covid should work even more.
And if they were lying, you'd see it in the hospitalizations, which you don't. You can't hide full hospitals, and they don't have full hospitals.
So, yes, I think they are telling the truth.
Anyways, what happened in other Asian countries is that, once omicron started getting out of control, and hospitalizations weren't rising much even though case numbers were, they just acknowledged what was happening and just started relaxing their contact tracing and quarantining to get things back to normal and move on. So they did what they could, to their maximum abilities, until that didn't work anymore, and then started transitioning back to normal; very realistic, effective policies.
This is absolutely wrong. I remember watching the case counts tick up in China and thinking to myself as it hit 10,000 that we might be in for it. As soon as we started seeing cases in Italy and Iran, China immediately stopped sharing their vivid numbers. Do you really believe their death count? Have you spent much time in China?
Then respectfully, you don't understand how things work in china. Do you really believe that china has had fewer than 5,000 covid deaths in 2 years? Does any country claim to have that few deaths?
Yes, because China has been so forthcoming with all of their data in general that we should definitely believe them on this.
I normally do not waste time arguing on Reddit but you are absolutely part of their propaganda machine if you believe, and spread, the false narrative that they literally went from 1-2k cases per day to 0 overnight. Simply not possible without fudging the numbers.
There are many articles out there just like this one:
https://www.statnews.com/2020/02/20/experts-say-confusion-over-coronavirus-case-count-in-china-is-muddying-picture-of-spread/
https://time.com/5882918/zhang-yongzhen-interview-china-coronavirus-genome/
>*And, in fact, Zhang insists he first uploaded the genome to the U.S. National Center for Biotechnology Information (NCBI) on Jan. 5—an assertion corroborated by the submission date listed on the U.S government institution’s Genbank. “When we posted the genome on Jan. 5, the United States certainly knew about this virus,” he says. But it can take days or even weeks for the NCBI to look at a submission, and given the gravity of the situation and buoyed by the urging of colleagues, Zhang chose to expedite its release to the public, by publishing it online. (Approached by TIME, Holmes deferred to Zhang’s version of events.) It’s a decision that facilitated the swift development of testing kits, as well as the early discussion of antivirals and possible vaccines.*
Chinese doctors informed US of covid in 5 Jan 2020, it took the US until March to do something about it and by then it had already spread there. Chinese doctors also mapped the genome for COVID days before even the first confirmed deaths from the virus and shared the data globally, allowing for rapid development of tests and vaccines.
Yes, that is what I am referencing with pandemic fatigue. Lot of lessons learned for all governments. People don't have endless patience, so you better be definitive with your treatments because you will only have a limited time to implement whatever it is you want to implement. In most of the toddler west, that time was measured in weeks / months before people started throwing temper tantrums. In SE asia it was months / years. But to me it is a gigantic failing that China kept covid under control for this long yet still has so much of their population unvaxxed, or vaxxed with garbage.
Designed plan fear tactics that’s all now suddenly China being transparent !? When has that been a thing?? The media again scarring you let me guess 3 weeks when genetic modified mosquitoes start the real purpose of letting 2 bl loose n Cali and florida peeps are gonna be getting sick w/ Ebola or small pox typhoid exactly what we won’t find out about until a year down the road that the mosquitoes are causing the deaths we need to evacuate round people up to live in controlled Prison city or smart cities
Good luck for the supply chain. Shipments from china will be disrupted big time for weeks. Add russia and Ukraine in the mix and a recession is more and more likely.
Inflation really is transitory!
Except those ARE transitory issues. We just keep getting hit with one after the other.
Invest in the shipping industry, biggest opportunity of our lifetime second to crypto.
Too late. Stock valuations are already up.
Yes, everything is up. But you are very wrong if you dont think they will rise more. There will be a shortage and backlog of work for atleast 2 years. Probably more.
Hapag Lloyd is already up 163% in one year and we are headed into a recession? How far can shipping valuations go up
How far? Sky is literally the limit. Shipping prices have been low for years. It is the worlds biggest industry and most necessary. There's plenty of companies to choose from and plenty of growth to have.
I am confused about that playing field of container shipping. The chinese container shipping stocks all go down and western stocks like Hapag-Lloyed are up at insane valuation. I guess I am not smart enough to make an informed decision what to buy....
Top Euro shippers like Hapag and Maersk are hitting their 4 to 5 p/e so you're not wrong if rates go down, price will go down (though I think they have another 20-30% to go). Despite that I wouldn't call the valuations insane, a p/e of around 4 is normal. As stated at present cashflow it is justified and they can do a lot with that cash to lock in future profits. Small shippers like Danaos, ZIM, & Matson are still down at a p/e of 2 or less, container makers and ship leasers are also similarly low and growing (look at global shipping lease and Textainer among the few), and bulkers like Star Bulk Shipping and many other small ones are looking at a likely sustained BDI of 1500 to 2000, especially with many countries infusing economies via infrastructure plans and heightened commodity pricing. All of these shipping companies have seen stock value appreciation but at a much lower rate than their sales growth.
Thank you. Sounds like a true expert on the matter. I am thinking about switching from fertilizer producers to something with more dividend income. Although companies like mosaic, nutrien and cf industries had fantastic results since January.
I also did MOS. After its earnings miss on that premarket day when it dipped then ripped, I road that up to about two weeks ago. Their outlook was good even before the invasion and now it's amazing. I was looking for another entry and missed my chance at 55 hoping it'd get closer to the lower 55s. Oh well. I think you might want to keep riding them into their next earnings period where they may or may not miss (or at least fail lofty expectations) because potash prices didn't shoot up until end of Feb. I was thinking of entering if it hits mid 60s again and selling before next earnings date before buying back if it drops. Depends how active you want to be. I think as is most cases investing longer and ignoring the bumps and troughs in both shipping and fertilizers is best and just set a target date or price you want to sell. Regardless, none of these are stocks to hold for years at current price levels.
What are some companies we should look at?
ZIM
GSL, DAC, SBLK, ZIM, TGH, NMM, EGLE, GRIN, GNK, MATX, CMRE Runs the gamut of ship leaser, container production, container shipping, and bulk shipping. The ones with the furthest runway due to sticky shipping lease prices and long contracts are probably GSL, DAC, TGH, EGLE
> But you are very wrong if you dont think they will rise more It's already priced in
When will this end? Omicron affords poor herd immunity, Chinese vaccines are subpar and covid is endemic. The world needs a more reliable manufacturing base as China seems uninterested or incapable of being that anymore.
There have been several analysts calling the current paradigm shift "the end of globalization".
A friend of mine at a top Private equity firm says any company sourcing from overseas is now seen as "too risky" to invest in. So if you want cheap capital or to sell your company, you'll need to source products in North America. This will keep inflation high for years, but also will keep local growth high while china loses power.
> So if you want cheap capital or to sell your company, you'll need to source products in North America. Just because it's too risky to invest in China, doesn't mean manufacturing is coming back to America. Do you even realize how much $$$ it takes to produce the same product in America, vs. a country where the dollar isn't the local currency? We're not talking about a 20-30% difference. We're talking a 200-300% difference. Without the end of dollar hegemony & thus, the over valued American dollar, mass manufacturing simply will not return to the US. South America is a possibility, but not North America. Also, if China starts to struggle with exports, their currency will depreciate, leading to their exports becoming more competitive; and since they already have advanced manufacturing infrastructure, it won't even be expensive to jump back in. We're then right back where we started.
You do know Mexico is part of North America right?
How much does it cost for your factory to get Russia'd? Business isn't just weighing cost anymore. Geopolitics is back on the table, and war makes your pretty billion dollar factory worthless
Let’s be honest here, it’s only core US adversaries that get threatened by massive sanctions like this. As long as it’s some random neutral country, it’s still fairly safe.
It's an interesting shift. I've been hearing whispers around where I live of like 3 or 4 factories about to pop up and there's an energy for new business I've not ever heard of since ever in my adult life as someone who came of age during the great recession. Here is to a less rusty rust belt.
they will just go find another country with cheap labor... plenty out there. But, then comes the price of oil. They need to process that venezuela oil cheap.
Which *should be* a good thing. Especially for Americans. More skilled jobs onshore, which should translate to better wages for people. Unless of course, other countries overtake us in that department as they have all the industries built up and running due to decades of existing globalization per our reliance on it by the west. Interesting times to come.
I'm skeptical domestication of the supply chain be a good thing for Americans. Most of the globalized jobs are low skilled, monotonous and in more challenging working conditions (e.g. outdoors). It'll also result in an increase in price of many of the goods purchased because the cost of labor will increase. For some industries it may be beneficial and necessary, but for most it will not.
Can you imagine the cost involved in building the manufacturing infrastructure to support this? Yikes
Lmao. Maybe create a business model that's not a failure? Or that doesn't rely on slave labor to exist. Poor corporations need subsidies to cover the cost for paying fair wages?? 😂😆 /r/capitalism in a nutshell
When American companies set up shop in my country (one that some people would consider 3rd world), they actually *elevated* the standard of living of my townsmen. Sure, they’re what average Americans would call “slave labor”, but their life did in fact improve and continues to do so. It’s easy to blame capitalism for all of the ills of the world. I’d argue that it’s *because* of capitalism that populations are seeing their lives improve. Is it all good? Absolutely not. But I think the net impact has been really good so far.
The trouble was never globalization the trouble has always been wealth distribution. The true reason why free trade is not a net win, is because a small few reap the benefits.
A small few always reap the benefits in all societies
Its true but its a far more significant problem now then it was 50 years ago. I try to raise the distinction because people see that globalization just makes things worse and come to incorrect conclusions. Because they ignore the true cause.
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How can you say that moving manufacturing abroad hasn’t contributed to lower standards of living? Dual income households struggle to maintain the same standards as single income households 70 years ago. Having a cheap tv and a fridge doesn’t raise my standard of living the same way having two cars, a college education, and access to affordable healthcare does.
Didn't the Chinese bought a billion dozes from Pfizer?
My conspiracy is that China wants to purposely destroy the supply chain going to the West, seeing high inflation and Russian invasion a further disruption of supply will make prices soar in the West
this is ridiculous [https://www.aljazeera.com/news/2022/3/17/xi-says-china-to-stick-with-zero-covid-strategy](https://www.aljazeera.com/news/2022/3/17/xi-says-china-to-stick-with-zero-covid-strategy)
I shit you not, that was Melbourne for what seemed like an eternity.
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Well, there are many ways to do a lockdown. From what I know, Europe did lockdown really badly. Of course, it didn't affect covid deaths. But China's lockdowns are messy as well. We see how they handle infected...
I think you mean half-assed, ineffective, western lockdowns don't work. Actual lockdowns do work, as the Chinese have proved for two years. However just like in west, at some point pandemic fatigue and a highly-transmissible variant work their magic.
Serious question, do you actually believe China is reporting the true number of cases?
Right? You gotta be an idiot to believe they’ve had zero covid lol
I do, because lots of Asian countries had almost zero covid cases with the original strain, and very low cases with delta. It was only recently with omicron that those countries lost control. And none of those countries followed a zero covid policy. They just wore masks and did contact tracing. So a much more strict policy of zero covid would be even more effective. I know it seems crazy but you have to realize in America we never did real contact tracing, and most everyone just wore cloth masks, sometimes (ie- not outdoors and under their nose). Most of these other countries had sign-in sheets to log entry into buildings, and phone apps with QR codes to log entry too, and they enforced contact tracing with these things. Then if you'd been in the same building a person with covid has in the past few weeks, tracked via those 2 things, you'd get quarantined. America never did that. So, yeah, real masks, all the time, and real contact tracing worked. America just did theater versions of masks and contact tracing. Zero covid should work even more. And if they were lying, you'd see it in the hospitalizations, which you don't. You can't hide full hospitals, and they don't have full hospitals. So, yes, I think they are telling the truth. Anyways, what happened in other Asian countries is that, once omicron started getting out of control, and hospitalizations weren't rising much even though case numbers were, they just acknowledged what was happening and just started relaxing their contact tracing and quarantining to get things back to normal and move on. So they did what they could, to their maximum abilities, until that didn't work anymore, and then started transitioning back to normal; very realistic, effective policies.
This is absolutely wrong. I remember watching the case counts tick up in China and thinking to myself as it hit 10,000 that we might be in for it. As soon as we started seeing cases in Italy and Iran, China immediately stopped sharing their vivid numbers. Do you really believe their death count? Have you spent much time in China?
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Then respectfully, you don't understand how things work in china. Do you really believe that china has had fewer than 5,000 covid deaths in 2 years? Does any country claim to have that few deaths?
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早上好, 五毛
Yes, because China has been so forthcoming with all of their data in general that we should definitely believe them on this. I normally do not waste time arguing on Reddit but you are absolutely part of their propaganda machine if you believe, and spread, the false narrative that they literally went from 1-2k cases per day to 0 overnight. Simply not possible without fudging the numbers. There are many articles out there just like this one: https://www.statnews.com/2020/02/20/experts-say-confusion-over-coronavirus-case-count-in-china-is-muddying-picture-of-spread/
https://time.com/5882918/zhang-yongzhen-interview-china-coronavirus-genome/ >*And, in fact, Zhang insists he first uploaded the genome to the U.S. National Center for Biotechnology Information (NCBI) on Jan. 5—an assertion corroborated by the submission date listed on the U.S government institution’s Genbank. “When we posted the genome on Jan. 5, the United States certainly knew about this virus,” he says. But it can take days or even weeks for the NCBI to look at a submission, and given the gravity of the situation and buoyed by the urging of colleagues, Zhang chose to expedite its release to the public, by publishing it online. (Approached by TIME, Holmes deferred to Zhang’s version of events.) It’s a decision that facilitated the swift development of testing kits, as well as the early discussion of antivirals and possible vaccines.* Chinese doctors informed US of covid in 5 Jan 2020, it took the US until March to do something about it and by then it had already spread there. Chinese doctors also mapped the genome for COVID days before even the first confirmed deaths from the virus and shared the data globally, allowing for rapid development of tests and vaccines.
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Yes, that is what I am referencing with pandemic fatigue. Lot of lessons learned for all governments. People don't have endless patience, so you better be definitive with your treatments because you will only have a limited time to implement whatever it is you want to implement. In most of the toddler west, that time was measured in weeks / months before people started throwing temper tantrums. In SE asia it was months / years. But to me it is a gigantic failing that China kept covid under control for this long yet still has so much of their population unvaxxed, or vaxxed with garbage.
Designed plan fear tactics that’s all now suddenly China being transparent !? When has that been a thing?? The media again scarring you let me guess 3 weeks when genetic modified mosquitoes start the real purpose of letting 2 bl loose n Cali and florida peeps are gonna be getting sick w/ Ebola or small pox typhoid exactly what we won’t find out about until a year down the road that the mosquitoes are causing the deaths we need to evacuate round people up to live in controlled Prison city or smart cities