Luke Justus

Shipping

[Shipping Kemah @ShippingKemah]

Elevated newbuilding activity at higher prices? ✅
Elevated S&P activity at higher prices? ✅
Elevated charter rates in tankers, drybulk, containers, and LPG? ✅
Elevated FFA trading? ✅
Elevated capital markets activity? ✅

Connecting the dots . . . Clarksons $CKN.LN

[Luke Justus @JustusLuke]

@TarunAmasa @OpenAI Would I’ve to try, thanks!

[Luke Justus @JustusLuke]

@nicochristie Would love to try!

[Luke Justus @JustusLuke]

@rhunterh I don’t know if trading FFAs is ~really~ cushy 😂

[Luke Justus @JustusLuke]

@SkidbladnirWind @christankerfund Dude. It’s supramaxes

[Luke Justus @JustusLuke]

@SkidbladnirWind @christankerfund Lol, NAV is not rocket science, def don’t need an S&P desk

[Luke Justus @JustusLuke]

@SkidbladnirWind @christankerfund Former colleague of mine from Clarksons is there, he def knows shipping. Plus they were involved in all the latest restructurings. Going to get more balanced advice from HL than the perma bull shops

[Luke Justus @JustusLuke]

@ManihiB 😂😂

[Luke Justus @JustusLuke]

@ed_fin Alpine looks like merger arb specialists

[Luke Justus @JustusLuke]

@freightmarket @joeriwestland @ed_fin @2Bulkers No. I mean changes in net debt after healthy earnings over time. A balance sheet doesn’t have any of the stuff you mentioned. And, yes, I agree, long cal FFA vs (some) dry equities a good trade here

[Luke Justus @JustusLuke]

@joeriwestland @freightmarket @ed_fin @2Bulkers I’m team stocks are overvalued vs FFAs, but 50% is just wrong. Have to look at balance sheets now as @joeriwestland points out

[Luke Justus @JustusLuke]

@ed_fin @freightmarket Agree with @ed_fin - my Twitter timeline has been pointing out how expensive dry equities look for a while

[Luke Justus @JustusLuke]

@freightmarket @OriginalBraila @mintzmyer That is one outcome, but not the only outcome. Simplistically, if you *know* you are buying at p/nav lows, you have four potential outcomes between freight market up or down and p/nav up or ~flat. Can lose from low p/nav, but low p/nav = better asymmetry of potential outcomes

[Luke Justus @JustusLuke]

@seanvestments If they were willing to sell at roughly todays prices (ex-div) in a stronger freight market… tells you a lot about risk/reward from here

[Luke Justus @JustusLuke]

@SWxBaldridge @GardinerIsland I’m just looking at what is priced into the FFA curve through next year. I’m not taking a view on rates vs the FFA curve

[Luke Justus @JustusLuke]

Dry bulk stocks think the FFA cal sell off is just a liquidation and choosing to ignore or just oblivious? Either way, long cals vs short dry equities looking like great relative value

[Luke Justus @JustusLuke]

@bairdk I knew I’d left some impression on you from our London days, didn’t know you’d still be thinking about relative value FFA trades 🤩

[Luke Justus @JustusLuke]

@OnlyAssets @mintzmyer Yes sir, gotta be careful!

[Luke Justus @JustusLuke]

@OnlyAssets @mintzmyer Steel impacts asset values, but FFAs/period rates still the main driver. Earnings even more important to equities, have to remember what you own. sometimes, mgmt will share cash flows with you. Usually they are not in the biz of selling ships and handing over the cash

[Luke Justus @JustusLuke]

@GardinerIsland Yes, and im looking further out the FFA curve too. Spot market volatility is fine... but the cals really tell you about the period market / asset values. Even a $DSX that does all period, any new fixtures are going to be much weaker considering whats happened to the FFA curve

[Luke Justus @JustusLuke]

@mintzmyer Yes - think we are saying the same thing! Broker quotes / NAVs widely used are stale. If you look at broker quotes vs the asset values implied by the FFA market (here I use 24 month strip vs 5yo Cape), it seems like we are due a mark down of asset values / NAVs