The must-know economic currents that affect dry bulk shippers (Part 1)


Are dry bulk shippers braving favorable economic waters?

The must-know economic currents that affect dry bulk shippers (Part 1)

By Xun Yao ChenDisclosure • Jan 10, 2014 1:44 pm •  Tweet  Share

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Economy: The ocean

As our must-read guide to investing in dry bulk shippers discusses, the global economy—China’s in particular—has a large influence over dry bulk shippers’ outlook. The economy is like the ocean, and the industries are the fish. No matter how fast and powerful the fish are, it’s no easy task to overcome ocean tides and currents.

Sensitivity to economyEnlarge Graph

Riding the economic wave

Some fish benefit from ocean currents against them. For example, trout will swim against the flow of the water so they can capture food like insects, worms, or plankton coming their way. But dry bulk shippers aren’t trout—they ride with the tide. This means investors who are invested in dry bulk shippers or are thinking of investing in dry bulk shippers must be able to read the ocean current—the economy.

There are several indicators that investors can use to get a sense of how the world and China’s economy are performing, rather than just relying on news headlines—which are full of noise. If investors focus on important indicators, they’re less likely to be swayed by emotions or others’ opinions and to make bad decisions. You just need to do some thinking and not make big mistakes in order to do well in life.

What are these indicators?

In this series, we’ll cover several indicators that help investors understand what the global economic situation is like. To do this, we’ve drawn on the knowledge of experts, economists, analysts, and money managers. These include the manufacturing PMI, industrial and electricity output, real estate construction, sales and investment activities, fuel consumption, the OECD’s leading index, and the inflation rate.

These indicators may sound simple, but keeping topics simple tends to work better in life. As Confucius says, “Life is really simple, but we insist on making it complicated.”

Continue to Part 2: Why Chinese purchasing managers’ views affect the dry bulk trade

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