An unusual energy flowed through last week’s Capital Link New York Maritime Forum. Call it genuine optimism.
In the wake of reports of fixtures at $300,000 per day for VLCCs and a rising product tanker market chasing crude rates up the ladder, at least the tanker crowd — especially the tanker crowd — were feeling the momentum inside Manhattan’s Metropolitan Club.
Where manufactured enthusiasm had been the best that most could manage amid a multi-year rates slump last time around, there were broader smiles, sharper backslaps, heartier handshakes and bouncier footsteps inside the private club.
The difference was not lost during an investors’ panel made up of financiers who had been willing to step into shipping bets during the darkest days.
“We were here two or three years ago and we thought we were at a funeral,” Evermore Global Advisors chief executive David Marcus said.
Richard Diamond, a fellow contrarian investor and principal of Castlewood Capital Partners, took exception. “No, funerals are more fun,” he said. “At least one person there is happy.”
Now both men were happy to see a little happiness — just not too much.
“Last time we were here, we said to each other, ‘Do you smell it? There’s opportunity here’,” Marcus said. “They can’t all be going out of business.
“And it’s still so early [in a recovery]. We want to see other investors start to come in. I see more heads up than I see down this year. But when I see everyone’s head up, you won’t see me at this conference any more.”
Diamond said he was heavily invested in the sector.
“Diversification is for weenies,” he said. “If people really want to diversify, get an ETF [exchange-traded fund]. I make secular bets.
“It’s not surprising people hate shipping. Nobody’s made money for six years. The stocks are currently priced for really bad outcomes.
“But I laugh when people say shipping is risky. You know what’s risky? Buying a German bond where you’re guaranteed to lose money. I’d rather buy some shares in Diamond S [Shipping].”
