According to Robert Bugbee, shipowners are gluttons with terrible aim, but investors will still turn up when things start going well.
At a panel on product tankers at Capital Link's 2019 International Shipping Forum in New York Monday, the Scorpio Tankers president described himself as "extremely bullish" on the sector and bristled at a suggestion that investors may look at shipping as "uninvestable."
“The gun’s been taken away from us. It’s impossible for us to shoot ourselves in the foot right now," he said.
Panel moderator and Stifel analyst Ben Nolan said some investors had told him that when capital is available, there is no capital discipline and that the shipowning community "has the propensity to shoot itself in the foot" once the money starts coming in.
"For a lot of people, it’s something that has marked this category univestiable,” he said.
Bugbee said the same comments were made in the mid-1980's and the early 2000's — both in the run up to bull markets in shipping.
“Twenty years ago I said we’re little children, we’ll never grow up, if you keep feeding us candy we’ll get sick and you’ll have to clean the mess up. That will happen again,” he said. “It’s simply not going to happen for a little while.”
It is going to take time, Bugbee said, before investors are willing to come back, but they will once it is clear the decade-plus of poor performance is behind them.
“I’m not going to invest because I’m so worried that stocks will get to a point where they’ll earn so much money and there will be so much free capital involved" that they might start making bad decisions, Bugbee asked sarcastically.
