Shipping’s Quintessential Investing Strategy

Credit: Adam Kent, Maritime Strategies International

Shipping’s quintessential investing strategy: buy at the trough and sell at the peak of a cycle. But what do you do if nothing is trading at or near a trough? This question vexes shipping-focused investors today.

Adam Kent of Maritime Strategies International created a slide that instantly encapsulates shipping’s market cycle orientation across the various segments. I most recently saw it at last month’s Marine Money Week conference and it continues to be one of my favorite summary slides.

In my view, savvy investing in shipping now is less about trying to ride the broad-based move of the markets (“beta” in hedge fund speak) and more about trying to find discrete opportunities and special situations where there is additional value to be created and captured (“alpha” in hedge fund speak).

That said, there is no shortage of fortunes that have been made (and lost) by seeking to optimally time shipping cycles.