ABSTRACT
The usual advice is to take advantage of the cycles to buy low and sell high. This is fair enough, as far as it goes, but shipping is a game of skill and playing the cycles depends on being able to recognize, or better still predict, the peaks and troughs on the freight chart. Just being right is not enough. An investor may correctly predict a market peak, but if the charterers take the same view there will be no long-term contracts. Similarly, in market troughs owners may be ready to buy cheap ships, but who is willing to sell for a loss? As Michael Hampton pointed out, consensus is generally not a good signpost. The best opportunities go to those who can judge when the other players in the market are wrong.
