The following was on a financial blog. There are too many things wrong with the following post to even bother correcting (except that NAT and FRO are fat payers). Happily, this guy will make some good money as the oil market continues to gyrate.

May 30, 2008
Oil tanker stocks. Big dividends
Filed under: None - Tags: FRO, NAT, oil tanker stocks - Bob Morris @ 8:45 am
I recently bought some Nordic American Tanker (NAT) and Frontline (FRO), having traded them on and off for years. They are oil tanker stocks. The daily rates their ships charge are generally pegged to the Baltic Dry Index, which has been soaring lately.
They tend to be volatile stocks, so maybe they aren't for the faint-hearted, but in addition to growth in the stock prices, they pay a whopping dividend. NAT currently yields 12% while FRO is at 17%, numbers which are not excessive for them. (I've owned NAT when it was consistently yielding above 20%.)
If you're looking for big dividend yields, you might want to look at the tankers, especially oil tankers.
Source: http://bobmorris.wordpress.com/

The intelligent conversation about shipping investments starts here.

Shipping has always had a conflicted relationship with the media. As an insular business, it is uncomfortable with the limelight and kleg lights, so it's sudden (albeit long overdue and well deserved) popularity with financial investors has created a dynamic previously not experienced. My introduction to shipping media came with advent of freight futures in the mid 1980s. Since futures were "new-fangled", and cash settled index trading was akin to Las Vegas (where the scrap metal exporters had their big convention), the trade press needed a lot of help covering it. So, with a good verbal side of the brain, I wrote a plethora of market reports after my trading day ended.

Around 1986, my then 203 year old employer (which later morphed into a the financial and commodity futures brokerage side- these days a huge clearer of freight forwards on Imarex, and the better half- the largest manager of hedge fund investments on the planet) bought a rusty combination carrier for barely the price of the scrap steel. The idea was to create a private placement, and we approached numerous funding sources (including Drexel- where a guy named Georgiopoulos was on the team looking at our big red book). My attempts to get our deal mentioned in the mainstream media were futile, but when I saw Jim Tisch and Loews in Business Week, around the same time with Majestic Shipping, I learned  the hard way that the media game was played with flacks and hacks.

Still, twenty years later, the relationship with the media is uneasy. Most things are either planted by the flacks, or taken out of context (or, worse, purposely sensationalized) by the hacks. I enjoyed the Bloomberg piece a few weeks ago where one owner predicted that Chinese yards would be hopelessly delayed (except the yard where his two dozen, or so, ships would be delivered on time and into a high market). Actually, I believe him, but I am counting more on profit sharing arrangements on existing vessels for that big upside. Just this week, a crane collapse at a Chinese yard was reported. Some 40 Panamaxes will be delayed maybe by six months. But back to the Bloomberg article- People who NEVER talk to the media were quoted in that article. Just how did that happen, exactly? How would the Bloomberg reporter have even found some of those guys? Another amusing but, this second one is sadly underwhelming piece- of business journalism was a Forbes piece several months ago about one of the big Greek owners where they attempted to skewer him. Since our owner friend is a $Billionaire who clearly knows what he's doing, his interests are aligned with shareholders. The reporter, who could barely skewer the olives in his drink at New York's famed Regency Hotel (brought to you by that same Tisch family that owns part of Majestic Shipping), seemed more interested in finding the next great scandal. But, he's looking in the wrong place.

Like I said, shipping is insular, it's handled a certain way, as one respected equity analyst was quoted as saying in the Forbes article. The bottom line is that shipping is quirky, it can be fathomed, its depths can be plumbed, substitute whatever nautical metaphor you want. But the financial world struggles to get good information. Consider that the Bloomberg piece got re-circulated numerous times, the financial blogger world goes to town on the vicissitudes of the Baltic Dry Index, and various shipping names are defamed over the internet on financial boards on a daily basis. So, the old proverb, evoking Greek mythology, comes to mind: "In the land of the blind, the one eyed Cyclops is all-seeing and omniscient."

So, what is this blog all about? What's better about it? What's more informative? And who exactly is this bdp1 Consulting Ltd anyway? I am a maritime consultant (which means I work on whatever I want to, with valued and respected clients) and then I also do some writing, with a small amount of blogging. I have a group of young staffers who are students at maritime schools; when I was younger (with my semi-Ivy League but not quite preppie enough background), I worked for people who had attended maritime schools, and learned a great deal about the business. 

The writing that I do can be compared to a shipowner's fleet- where a certain portion is traded on a spot basis and thus makes it into the daily fixture reports. But, using that analogy, the main portion of my fleet is in long term charters- most of bdp1 Consulting work involves projects on ship finance, freight economics and, in particular forward freight, risk management and related matters, mostly under the radar and very quiet. But, all those market reports (yes, I write quite a few of them, for well known trade magazines, without a byline attached) convey a very exciting spot market, and the spot market attracts attention. Yet, in the background, shipping is very methodical. So, readers will gain insights into both sides, I hope. Do you see what I mean about "conflicted"?

Industrial shipping people crave reliability; they disdain excitement. With this mindset, the spot portion jumps off the page, attracting folks like our financial blogger friend, and others. This blog will present irreverent and sometimes different points of view; it's not better than others, but hopefully it will be worth reading because of the wide range of views and people I talk to on a daily basis. I am not much on gossip (well, maybe I am better than I'd admit to), but there are some good winds blowing out in the trade press. With shipping, there are no right answers, but sometimes some old fashioned industry knowledge, or some plain common sense (like how do you fix tankers based on a dry index???) are called for. And, the bottom line- some of the owners mentioned in this blog, or alluded to, have made created values in the hundreds of $Millions, if not $Billions. Those are the rock stars. They should be celebrated- irrespective of their media savvy or media posture.

One of my mentors way back there described shipping as a huge jig-saw puzzle. Nobody has all the answers, but, if readers will follow my inquiring mind around as it zigs and zags, some shapes of that big puzzle may get better definition. I want to thank my friends at Capital Link, especially Nicolas Bornozis (who is off to Posidonia as this blog is being written), for the opportunity to present my views. Hopefully, there will be some good dialogue.  Yesterday, I attended a fascinating lecture regarding the impacts of "The Arctic" (global warming, politics, energy- what a huge and fascinating issue) on shipping, and will probably want to discuss it further after hearing reports from Nicolas, and others, about the warming is going over in Glyfada and the surrounding areas.