roustabout investment corner: how to count trees

Levin from _Anna Karenina_ on the importance of counting the trees:

"But you're so positive you know all the lore of the forest. It's difficult. Have you counted the trees?"

"How count the trees?" said Stepan Arkadyevitch, laughing, still trying to draw his friend out of his ill-temper. "Count the sands of the sea, number the stars. Some higher power might do it."

"Oh, well, the higher power of Ryabinin can. Not a single merchant ever buys a forest without counting the trees, unless they get it given them for nothing, as you're doing now. I know your forest."

Its possible to find out what a shipping company earns before they announce their earnings.

Shipping fixture details are made available on a subscription basis through the Baltic Exchange, the same folks who produce the BDI, and for free at 2 shipbrokers: platou and skaarup. Since the Baltic data costs 3+ grand (per annum) if you deal with them directly, and the shipbrokers seem to make the same data available for free, we'll go with them.

how to count trees run the numbers for shippers

1) get a copy of the fleet list (looks like this)
2) match each ship to a fixture on platou or skaarup (looks like this)

note: platou has historical data going back several months, and so is a good place to get started.

of course *some* ships may be out under contracts that predate the data, and so will remain a mystery.

3) parse this into a spreadsheet (columns for charterer, ship name, rate, date, dead weight)

note: the date stamp is particularly wonky in this data: example "10-12/8.2008"

this seems to be the start date of the fixture w/ a few days of padding ^^^^
(ie they take the ship around August 10th-12th)

4) subtract fixed costs to taste (daily operating expenses, debt service, etc)

5) compare results to quarterly earnings. redo step 4 to calibrate.

Now this is all a *enourmous* pain in the ass to do by hand and crazy sexy when done with a program. The data fetching can be done via screen scraping (choosy roustabouts like Beautiful Soup) and then chucked out into CSV or XML. Fleet list data for a slew of different shipping companies can be kept current in a similar fashion - either in a plaintext conf file or in a db table - all the public firms have their ship details online. Operating costs (ie 8k/day for a panamax), debt service, etc can be kept as constants or one-off values. AND all of this can be setup to run from a cron job once or twice a day.

The result of all this sexiness?

A daily report that keeps one up-to-date on projected cash flow and EBITDA before earnings announcements. This so fucking works and means you don't have to wait around for some higher power to count all the trees and tell you the number.

the proper use of a tree counter

While it might be possible to do all this with the accuracy of the firm's CFO and try to be all predictive with earnings and buy/sell around quarterly announcements, this is ultimately a foolish and very tedious game.

The proper use of a tree counter is all about the dividend.

The tracking of fixtures offers a sanity check of the dividend. That is, it can be an early warning system to see if the dividend is at risk and a way to determine its long term viability.

Most shippers who offer high-dividend yields are weighted to long term contracts rather than spot voyages; a properly calibrated tree counter can reveal the ones w/ the best rates, which ones have the most potential to increase their dividend, and permit you to check your investment with a proper degree of diligence (and sexiness) and a minimum amount of time.

Scrooge McDuck from an old episode of DuckTales, the animated cartoon:

"work smarter, not harder"

bucky ball in montreal

^^^^^ Leonard sent me this *awesome* postcard from Montreal

I picture Fuller talking to the local government and presenting his plans to enclose the whole city in a dome, which of course is shot down. So he compromises with a little starter dome just outside the city.

The Canadians are more willing to try new things.

Fuller wanted to enclose Manhattan in an enormous dome, too, but we didn't give him a pilot project. Our nearest dome is probably the big one at Epcot down in Florida.

music story corner

I've been listening to a lot of Brahms the past few days (the tragic overture and symphony no 1 in particular) which has been new for me.

My itunes just incremented into Guns N' Roses "Appetite for Destruction", which I didn't realize I owned. It probably came into my possession via friends with massive mp3 collections.

This album was popular just before the time of Nirvana when I lived in the deep south. "Nevermind" was really a changing experience, for me but also for the whole peer group at the time, which may warrant its own story later on. So anyway, guns and roses. okay.

Cable TV was really the only connection to the greater world at that time, and with cable came MTV. Guns N' Roses was a *total* MTV band. You had Axl rose, with the 'kill your idols' t-shirt and leather pants aesthetic, the guitarist with the top hat and ciggie, the power ballads, etc, all the moving pieces required for a media-friendly band.

Adam Curry was the host of the top 20 videos show.

MTV showed videos.

I was mostly in a Nintendo (read: nofriendo) mode at this point, but my neighbor Dustin had a cd player his Dad had given him for Xmas the prior year. (a side note: the children of divorce really do tend to get *awesome* xmas presents and their friends resent them as a result. does dad realize the peer hatred he stirs up by giving his kid in the working class neighb' a cd player in 1988? he does not) In any case, guns and roses. Dustin had the first album as well as Use Your Illusion I and II.

At the time I only had a copy of 'paradise city' recorded from the mtv top20 video show onto a cassette tape (barbaric) and so I was pretty envious. Dustin was nonchalant about the whole thing.

We played a lot of Dragon Warrior at the time (one person slugging through, killing and getting experience points, while the other offering advice/commentary/"HIT HIM AGAIN" - picture a golf caddie with swords instead of clubs) -

Dustin's bed had a foot board which was way uncomfortable to sit on - his room was setup and furnished in a way which, in retrospect, makes me think he inherited his parents furniture post-divorce, which is sort of sucky, but anyway - and required moving back and forth between sitting on the foot board then sitting on the (more uncomfortable) floor and then back again.

But as far as 8-bit RPGs go, Dragon Warrior was fairly straightforward (unlike the port of Ultima to the NES, which felt like it should have been advertised as HEY DO YOU LIKE ALL THOSE DUNGEON LEVELS? THIS HAS A BAZILLION OF 'EM - GET YER GRAPH PAPER) and we beat it pretty quickly, all to the soundtrack of Guns N' Roses.

Thankfully punk broke the next year.

rain rain

stormy night and now a gray morning.

"i" statements: in brief

i think

analytic, for sure.  only appropriate for epistemological information; facts, figures, trivia.

when i think is used for anything personal it is *highly* distancing

i feel

this one i never heard much until i went to school, and you can't get away from it up here.

while it is much less distancing than i think - and feels better to say and hear - it can be overused.  there are some who use this sort of statement too often, and it loses its weight. we've all met people who say "i feel" way too much; it makes someone seem overly hippy-dippy or childish.  

Its still an important statement, the i feel, and when used with care can lead to direct expression.

i suspect

sort of an outward focused i think useful in conjecture or forward-looking statements.

i reckon

good for opinions.  it has a sort of british english style (reminds me a man named stack i used to work with) but also a matthew mcconaughey with a half-cut cigar southern association.

it also has a feeling of not being so attached.  i reckon i could do this, or that, but i'm not tied to either one really.  this lack of attachment is good to express, sometimes.

a moving picture

i just watched the diving bell and the butterfly, and phew.

julian schnabel may seem like an insincere uber-artist douchebag like not my kind of fellow, but oh my he does make a moving film. i am moved.

an open and shut case

Shortest Law and Order episode ever - from the Camus notebooks:

December 1938

Story of a foreign man who kills his mistress in the back room of a café.  Then he takes the body by the hair, drags it into the main room, and then out into the street, where he is arrested. 

He had invested some money in the café, and the owner had told him not to bring his mistress there.  She had come all the same.  He ordered her to leave.  She refused. That was why he killed her.

camping with camus' carnets

The only copy of The Fall at the library was in French, so I checked out an early edition of Camus' notebooks instead.

The entries reveal very little about him directly; Camus was very outward and other-focused and made very conservative use of the I (or the Je as it were). The editor / translator makes up for this humble discretion via extremely chatty footnotes; he inserts asides ranging from the familial "Camus loved his mother intensely" to the bawdily formal "this and several other entries tend to confirm the rumors that Camus led a rather vigorous sexual life". Ça alors!

It is a much different experience to read the notebooks of a great writer rather than their finished works. The feeling is like being stuck in an elevator with someone who is starting to go slightly mad. While the slightly-mad person has a slew of things to say, some of them fantastic, the lack of any discernible thread in the transitions makes the whole experience somewhat manic.

From one of Camus' entries; dated May, 1935:

He is at ease in sincerity. Very rare.

When I was young, I expected people to give me more than they could - continuous friendship, permanent emotion. Now I have learned to expect less of them than they can give - a silent companionship. And their emotions, their friendship, and noble gestures keep their full miraculous value in my eyes; wholly the fruit of grace.

They had already had too much to drink and wanted a meal, but it was Christmas Eve and the restaurant was full. They were turned away, but then kicked the owner's wife who was pregnant (...)

The last one goes on to describe several scenes from a short story, but you get the idea. The notebooks are best read in small doses - though probably not before bed (unless you're a fan of strange dreams, possibly involving pregnant wife kicking).

The notebooks were originally published as Les Carnets due to another book of lit criticism on Camus already bearing the title Cahiers. The word "carnet" shows up in English as a permit for doing certain things abroad - like camping (?) - and in a way these notebook entries may have served a similar purpose. Camus was able to visit his ideas prior to them showing up in his finished works. Viewing the campground as an outsider is a far different experience: a wild animal searching for leftovers.

If you have a copy of The Fall checked out from the library, please return it soon. Merci!

cooking with ian curtis

Also on the theme of Ian, while at Leonard's b-day party I put out the idea of a cooking show entitled "Cooking with Ian Curtis".  

You can just imagine.

On a related note it seems that someone found a diary of Sartre's cooking endeavors:

October 10

I find myself trying ever more radical interpretations of traditional dishes, in an effort to somehow express the void I feel so acutely. Today I tried this recipe:

Tuna Casserole
Ingredients: 1 large casserole dish
Place the casserole dish in a cold oven. Place a chair facing the oven and sit in it forever. Think about how hungry you are. When night falls, do not turn on the light

ian curtis on marketing

Dark times.

For the record: the Joy Division frontman was probably more of a Dr. Martens sort of fellow.

... a joke that just came to mind:

How does Ian Curtis react to a telemarketer? "they keep calling me!"

(repeat 10-15x or so*)

new iphone review: in brief

the running man

i've reached the point where when i wake up, i pretty much immediately feel like running, and if i don't go for a run, i feel bad and am in a crap mood.

this is to say, its probably a habit now, and if so, it takes about six weeks to establish because this is roughly how much time has passed since i read Murakami's essay in the New Yorker on running (they only have the abstract online? lame) from his new book What I talk about when I talk about running.

the essay is pretty inspiring and i started running every morning afterwards (instead of my yeoman's pace of every-other-day-maybe)

(the book's title is in reference to the Raymond Carver / Gordon Lish short story, no doubt)

***

on a diff note - the previous post on roustabout investments is not so much to my liking. 

it feels wooden to me in some parts, like an article pumping stocks in some awful magazine.  i may take another whack at it.

roustabout investments: high-dividend edition

A surprising thing about the world of dry-bulk shipping is the whole dividend thing.

These stocks pay *real* dividends every quarter, something very rare in the tech industry (for instance when Microsoft initiated a dividend policy it was seen as a negative by many folks, a sign that growth was slowing.  if Apple were to start offering a dividend, the stock would no doubt immediately plummet).  The de facto dividend in shipping companies seems to stem from the fact that transport is mostly about slow growth and expensive assets: trains, planes, boats, etc.  Thus the main return on investment for the stockholder in a shipping company was in the dividend. 

The China boom changed all this, of course.  

China's thirst for heavy things (iron and coal, but also soybeans, grain, etc) from far-away places like Australia and Brazil has led to record high rates in dry-bulk shipping ... and led to the normally sleepy world of dry-bulk transport to become a growth story over the past few years.  This has been written about by lots of folks (google 'dry bulk shipping all time high' for more) --

Thus these stocks, which were already fairly volatile to movements in the BDI, an index of shipping rates, became even more so.  But even the currently 'modest' BDI of 9313 reflects a spot rate of $77,000 per day for a Panamax vessel - a rate consisting of 75%+ profit for the ship's owner.  

Of course the daily ebb and flow of the BDI doesn't matter for boats locked up in long-term contracts, which is the strategy used by two firms offering the highest dividends:

Diana Shipping, Inc - DSX

Diana has all their vessels locked into long term contracts, and they finance new vessel purchases via secondary share offerings which are accretive to earnings.  The current yield is 11.6% and the dividend should easily increase over the next year (along with the share price).

Golden Ocean - GDOCF.PK

Golden Ocean is based in Norway led by John Fredrickson, who seems to be a legend in the shipping world.  They have stated that it is Management's intention that *all* free cash flow be made available for the dividend, which has resulted in a dividend distribution of $0.55 cents last quarter on a stock trading at $5.90 (today's close).  If the same quarterly dividend were to take place over the next year, the dividend of $2.20 would reflect the *completely absurd* yield of 37%.  

Golden's dividend is not fixed.  It is decided by management depending on how the books look in a given quarter.  However 70% of their fleet is under long term contract and John Fredrickson has a history of creating outperforming companies - he is also the founder of the more well-known dividend behemoth Frontline (FRO) - currently yielding 17% - from which Golden Ocean was spun-off in 2004.

Until recently Golden Ocean was only traded on the Oslo exchange and is virtually unknown in the US outside of shipping circles (and yahoo message boards).  Since its traded otc on pink sheets, little information is circulated on them (a search on edgar reveals some mighty old filings indeed).  Fredrickson is the 2nd richest man in Norway and owns 30% of Golden. 

No doubt the dividend policy will attract attention just as it did at Frontline.

Both Diana and Golden Ocean have been beaten down along with the overall market in the past several weeks, even more so due to a stumble in the BDI from May to July (a drop of ~20% which seems to be due in part to iron-ore negotiations between China and several suppliers, BHP and Rio Tinto in particular).  Thus why these yields are so high.  

That is to say that while the BDI and shipping spot rates have little near term impact on the profits of these two companies it does impact their share price.    

The overall shortage of dry-bulk ships looks to be a certainty until 2010+ when a number of newbuilding boats will come online .... and shipping rates are expected to be *half* of what they are today.  This can be looked into in more detail in the FFA, or future freight arrangements, a whole other heap of analytical information similar to oil futures.  In any event the long term contracts should keep the dividend safe at these 2 companies for the next 12-18 months minimum.

All things considered, for the next year things look pretty golden at Golden (and Diana)

note: the roustabout investment club is intended to be an outlet for "stock talk" with family and friends and is in no way or shape to be construed as investment advice!  i am no stockbroker and don't want to be yours.

the roustabout investment club

I have spent some time researching shipping stocks over the past several months, as their business models are dirt simple and generate *heaps* of cash. Of course, simplicity and meeting (usually beating) earnings estimates has not prevented them from getting hammered with every other public company over the past several months; a lowering tide lowers all boats one might say. Instead it has led to a number of companies that are absurdly undervalued.

Thus begins the roustabout investment club - a series of posts on the surprisingly fascinating world of dry-bulk shipping.  

(this is to say that I've spent way too much time researching all this and I'm going to make it worthwhile, damnt)

the polite subtlety of the new york sun

On the Jesse Jackson gaffe:

"See, Barack been, um, talking down to black people on this faith-based ... Barack, he's talking down to black people," Rev. Jackson said in a whisper to an executive at the UnitedHealth Group, Reed Tuckson, a fellow guest on the Fox program. Rev. Jackson used a crude reference that suggested he would like to perform an orchiectomy on Mr. Obama.

Coffee + New York Daily News Still Life

^^^ by Ng Woon Lam, found on flickr

sound and fury, signifying something..

^^^ currently reading

the title is from macbeth:

"Tomorrow and tomorrow and tomorrow,
Creeps in this petty pace from day to day
To the last syllable of recorded time,
And all our yesterdays have lighted fools
The way to dusty death. Out, out, brief candle!
Life's but a walking shadow, a poor player
That struts and frets his hour upon the stage
And then is heard no more: it is a tale
Told by an idiot, full of sound and fury,
Signifying nothing."

Buckminster Fuller at the Whitney

Yesterday I went to the Buckminster Fuller show at the Whitney w/ friends.

Leonard wrote of the tiptoeing-around-the-question-of-sanity aspect in the show:

I don't think the Whitney really knows how to deal with Fuller. I don't know how to deal with Fuller either, but if I were doing an exhibit on him I certainly wouldn't tiptoe around the fact that he was crazy.

I don't really say this pejoratively. Being smart and crazy is a great way to have transcendent ideas. It's not polite to say that people are crazy, and I guess I could see skimming over an artist's craziness, but it's rare that an artist literally tries to change society with specific works of art, and art isn't judged by the same standards as math or architecture. I would have liked to see a plaque besides some of Fuller's stuff with a guess as to what was crazy and what was a good idea.

Above is a draft of what a Whitney warning card may have looked like.

This would have been *way* more clever if my printer had not run out of color ink last night.

a man and his symbols

this was a dream:

i'm sitting on a bleacher, holding a can of soda, with several people in a room that is a mix between an office and a gym. the person next to me says i need to vomit into your can and immediately proceeds to vomit into my can. i'm holding it and thinking this is pretty foul, and so i move to put the can down on the ground. the person pauses and says well so you aren't even gonna hold the can for me? I leave and I'm not sure if he keeps on using the can or not.

The puking guy is a blend of traits from a couple of folks I knew in the technology world. I think the soda was a coke.

french music hour

also worth a listen and a look: 

 

amélie-les-crayons - le chant des coquelicots

mlle hardy in the bestest music video set in an amusement park

françoise hardy == très cool

worth a listen.

good tracks thus far: tous les garcons et les filles, grand hôtel

^^^^ yeah the gloved handshake thing is a little creepy

shin splints at 6am

This morning I woke up after a dream where my lower legs had been sawed off, but it turned out to just be a wicked case of shin splints.

yes, ouch.

nc trip: book report

books bought

dorothy parker ~ complete stories

turgenev ~ fathers and sons

the steinbeck viking reader

books given

recollections of a country doctor ~ matt burke

misc noteworthy stuff

the magic olympics [harpers]

why the g.o.p. must die [also harpers]

how the mind works [nyrb]

There is a fantastic used book store a few miles away from my Mom's house, where I rescued a 1965 edition of Fathers and Sons for $1.80 along w/ a few other notables. Bazarov seems to be the most crafted character so far.

Its fun to pick up on some of the common themes and objects after reading other books from 19th century Russians ... there are more references to samovars, mazurkas, and french-speaking aristocrats than you can shake a recently-emancipated serf at in Fathers and Sons.

***

Dorothy Parker has a sense of wit often described as acerbic, but it feels very innocent to me.

From a passage about reading in The Little Hours quoted in the intro:

[La Rochefoucauld] said that if nobody had ever learned to read, very few people would be in love. There was a man for you, and that's what he thought of it. Good for you, La Rochefoucauld; nice going, boy. I wish I'd never learned to read. I wish I'd never learned to take off my clothes. Then I wouldn't have been caught in this jam at half-past four in the morning. If nobody had ever learned to undress, very few people would be in love.

Maybe the feeling of innocence comes from nice going, boy - or maybe innocence is simply one feeling that sharp wit inspires? Then again there is the whole reading versus taking-off-clothes and jam at half-past four thing ... so maybe not so innocent after all.

Ms Parker is also the (alleged) source of this defense of alcoholism:

i'd rather have a bottle in front of me than a frontal lobotomy

I always thought this line originated from Tom Waits..

***

The Portable Steinbeck is mostly excerpts from his novels, which is unfortunate. It was cheap and fantastically used - and check out that cover photo!

After a long day of writing at my desk, I like to enjoy a smooth unfiltered Camel cigarette. I'm John Steinbeck and I approved this message.

I'll eventually pass it along to someone who hasn't discovered the beauty of his writing yet.