An important read for anyone with dry bulk shipping stocks
This is my article on Diana's earnings, highlighting management's extremely cautious outlook for the entire sector... including banks and shipyards. Diana's President sees the potential for a banking crisis "to rival the subprime crisis" based upon the scale of new shipbuilding orders still on the books and the scale of financing behind it... in many cases for companies already leveraged to the point of being in contravention of credit terms.
Please let me know what you think... I haven't changed my stance.. I still see DSX as a tremendous long-term investment because I do think it's singularly in the best position to survive a protracted crisis, but I wouldn't be buying here. I'd wait until the Dow is under 6,000 to consider accumulating... there's not hurry... this will take 1-2 years to play out, and will include some ugly earnings reports for all operators.
I reiterate my warning to all Fools to stay clear of highly leveraged shippers, and I'm even considering reversing my stance on EGLE due to the scale of its new-buildings program.
If you want some good news to balance out the karma from Diana's alarming concerns, consider the production growth that's coming out of my favorite gold miners right now... especially Yamana!!
Tread very carefully, Fools... I think the world is about to discover just how deep this depression will cut.
Always with thoughts of my fellow Fools, and wishing for their good fortune.