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Drybulk Shipping: "Because Americans are the dumbest investors around, and there’s lots of liquidity in this market’”

Recs

13

May 20, 2008 – Comments (24) | RELATED TICKERS: TBSI.DL , DRYS , GNK

"A concept that works / 20 million other white rappers emerge."

Eminem Show

“It was surreal. When someone asked why he was doing the deal, here–now, he actually said, basically, ‘Because Americans are the dumbest investors around, and there’s lots of liquidity in this market.’”

CEO Dryship, George Economou

I am not in the "dry bulk" industry. I have done my share of world traveling and I have never seen a shortage of ships. There are always plenty of ships parked outside the port waiting/hoping for a charter. If there was a temporary shortage, it is going to be cured by the severe recession in bound to the US and a slow down in the US' debt ridden, over leveraged, “consumption based” economy. ( ref Consumer Sentiment: Is the Worst Yet To Come?) The ships that are being built or utilized currently are getting ready to be parked and transformed to barnacle rust collectors. Many of their owners will cash out and file bankruptcy (George Economou's Alpha shipping, again?).

There is a reason many Top Fools gave Dryships an Underperform. You can take your pick of article and realize how funny this company is. 

Curious George
Nathan Vardi 02.25.08, 12:00 AM ET

http://www.forbes.com/forbes/2008/0225/095.html

World's Scariest Stock: DryShips
http://www.fool.com/investing/small-cap/2007/10/29/dryships-is-haunted.aspx

Dryships’ Debut Shows Speculation,
Liquidity Trumping Experience
“It was surreal. When someone asked why he was doing the deal, here–now, he actually said, basically, ‘Because Americans are the dumbest investors around, and there’s lots of liquidity in this market.’”
http://www.weedenco.com/welling/archive/sb/v07i04sblogo.asp

There is a major commodity bubble. When it pops the first to get taken out will be the leveraged, cash short and the stupid, which includes many in the "Drybulk" sector. 

Many think  “drybulk shipping” is a commodity play. It is a consumption/transportation play. As the consumption, spending, construction slows so will this sector. Many of these shippers were single digit stocks three years ago, they will return there once the bubble burst.

A highlight from: Curious George

"Who are my investors? Computer models, hedge funds and some institutions that go in and make $10 and get out." So much for consensus. DryShips has been operating with two employees (Economou, 54, and his internal auditor) since his chief financial officer quit in May, the second to split in three years. The company's fleet is managed by Cardiff, 70% owned by Economou, which gets more than $7 million a year for its troubles.

"A family business, this. Economou's two former wives own a total 15% of DryShips. Chryssoula Kandylidis, his sister, holds 30% of Cardiff Marine. With proceeds from its initial offering, DryShips bought six ships that had recently been picked up by Kandylidis. Five were sold at cost, but DryShips paid his sister a $3 million fee. Economou says she made very little money on the deal and bore great risk.

Kandylidis' son, Antonios Kandylidis, is also in this cozy network. The 30-year-old Antonios is the founder and largest shareholder in OceanFreight (nasdaq: OCNF - news - people ), which raised $218 million when it went public on the Nasdaq last year. Cardiff helped OceanFreight pick up its first dry-bulk vessels, helps manage that fleet and shares office space with OceanFreight.

A rocky maiden voyage. OceanFreight had to clarify its reporting in October, announcing third-quarter earnings per share were really 7 cents as opposed to the 11 cents it had advertised a day earlier. In December Antonios fired his chief executive, who says he intends to sue for wrongful termination. Then OceanFreight's chief financial officer quit; Antonios took over both the executive roles. Within days of the fuss OceanFreight announced it was buying the first of two tankers privately owned by Economou for $112 million."

Of interest also many dry bulk shippers are unloading shares on the stupid:

Secondary Offerings, Debt, and Defaults

Minyanville Professor David Nelson and Minyan Peter were talking about secondary offerings today. Let's take a look.

Professor Nelson: Shipping Secondaries

One by one the Dry Bulk Shippers are reporting blow out quarters. However, another pattern seems to be developing under the surface. Shortly after reporting and getting a big bump from the EPS reports, they've been announcing secondary's. Last week it was TBS International (TBSI) and this morning it's Genko Shipping (GNK).

Disclosure: I am looking to short a couple of these shippers, once the liquidity and stupidity DRYS up.  

24 Comments – Post Your Own

#1) On May 20, 2008 at 2:56 AM, dbhealy (37.97) wrote:

don't stop believing, lordz..

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#2) On May 20, 2008 at 3:46 AM, Tastylunch (29.20) wrote:

Eminem Show

I was more a doggyfizzle televizzle guy myself. Don't think most of those vids are CAPS appropriate though :-)

I'll admit I wish hadn't redthumbed DRYS when I did, companies like that can go up virtually forever as long macro events are on their side.... Bre-X anybody?

When it goes bust I wonder if TMFEldrehad will reclaim the top spot, he's down something like a 1000 points on it... 

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#3) On May 20, 2008 at 4:49 AM, abitare (33.77) wrote:

Lordz,

Son, Ive made a life out of readin peoples faces,
And knowin what their cards were by the way they held their eyes.
So if you dont mind my sayin, I can see youre out of aces.
For a taste of your whiskey Ill give you some advice.

Said, if youre gonna play the game, boy, ya gotta learn to play it right.

You got to know when to hold em, know when to fold em,
Know when to walk away and know when to run.
You never count your money when youre sittin at the table.
Therell be time enough for countin when the dealins done.

Now evry gambler knows that the secret to survivin
Is knowin what to throw away and knowing what to keep.
cause evry hands a winner and evry hands a loser,

Tastylunch

DRYS is a short squeeze dream. It is an easy short/undeperform once you look into it. Then they squeeze you. It is a trap. DRYS will be a single digit stock eventually. Once the story ends and people stop shorting it.

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#4) On May 20, 2008 at 4:54 AM, abitare (33.77) wrote:

"They dont have only 2 employees wtf is wrong with you ??"

DRYS - 2 employees no CFO

http://finance.yahoo.com/q/pr?s=DRYS 

How hard was that? 

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#5) On May 20, 2008 at 6:38 AM, Story500r (92.03) wrote:

the market has its reasons for which reason does not know

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#6) On May 20, 2008 at 10:00 AM, thebigjigga (< 20) wrote:

Oh no, everyone listen to LordZ and his whole 2 months of investing experience.  He know's what's up.  He and his self-proclaimed greatness.  Get outta here and go back to the Yahoo Message boards you twit.

I wouldn't touch DRYS with a 10-foot pole.  I'm not exposing myself to that type of risk and I would never short it either.  Never short a stock with that much short interest, unless you are looking to be squeezed. Report this comment
#7) On May 20, 2008 at 10:25 AM, abitare (33.77) wrote:

"They dont have only 2 employees wtf is wrong with you ??"

DRYS - 2 employees no CFO

http://finance.yahoo.com/q/pr?s=DRYS 

How hard was that? 

Report this comment
#8) On May 20, 2008 at 11:10 AM, LordZ wrote:

I made 40 % on my investment in DRYS...

I'll admit I almost didnt risk buying when I read such crappy stories many of you like to twist and inflate. Many of these stories are over 3 years old.

I thought omg why would anyone buy this, and than I looked into it more, obviously theres plenty of money trying to short this stock and theres plenty buying it.

I looked at the numbers and wow, the growth the eps, and their ability to gobble up ships and other businesses.

Plus their fleet utilization was at 99%

I believe they only had 1 ship that was dry docked.

Lets wait and see 3 days when some more shorts get squeezed.

George knows how to make money.

In 1 quarter this company beats other investments even if they were to add up their entire 4 quarters.

Bears make money

Bulls make money

Pigs get slaughtered

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#9) On May 20, 2008 at 11:34 AM, LordZ wrote:

That came from  the microsoft finance page, but its getting old trying to correct such a blatant hatred on DRYS.

I guess these following institutional investment are idiots as well buying DRYS ???

Neuberger Berman, LLC728,100728,100100.056,354,9401.70.112-31-07Transamerica Investment Management, LLC567,758-478,376-45.7-51,086,3441.30.312-31-07Acadian Asset Management, Inc.519,015-26,083-4.8-11,096,3961.20.203-31-08Chilton Investment Company, LLC514,878514,878100.039,851,5561.20.712-31-07DWS Investment GmbH400,000200,000100.012,792,0000.90.212-31-07Geosphere Capital Management400,000400,000100.023,964,0000.97.103-31-08Hodges Capital Management, Inc.371,440265,298249.914,037,5790.92.503-31-08NFJ Investment Group L.P.366,900118,90047.95,869,7400.90.112-31-07Goldman Sachs & Company, Inc.355,114204,228135.413,779,3400.80.012-31-07Renaissance Technologies Corp.353,900-678,028-65.7-66,348,4800.80.012-31-07D. E. Shaw & Co., L.P.286,705149,085108.39,689,5660.70.112-31-07J.P. Morgan Investment Management Inc. (New York)264,12694,41755.62,688,3120.60.003-31-08Bear, Stearns & Co. Inc.238,545231,0453,080.617,782,0840.60.112-31-07Credit Suisse Securities (USA) LLC227,030178,616368.913,174,1940.50.012-31-07Fidelity Management & Research216,800158,800273.811,511,6000.50.012-31-07

 

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#10) On May 20, 2008 at 11:44 AM, abitare (33.77) wrote:

LordZ,

I quoted Forbes and used Yahoo Finance. Do you want more?

institutional investment are idiots as well buying DRYS ???

Take a look at the institutions, that owned CFC, Enron, Tyco, AHM, there are plenty of idiot institutions.

There is a difference between being lucky and being good. You should, after a certain age understand which one you are.

You are trying to defend the un-defendable.

"When you are in a hole stop digging" 

You are Kevin James here:

 

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#11) On May 20, 2008 at 12:41 PM, GS751 (27.69) wrote:

wait I saw my name in there, from LordZ, (I know you are referring to Curious George) Althought I do get the George of the Jungle thing here and there.  But LordZ I will answer your questions, yes my goal is to make money, sometimes I'm feel like Im good at it, cough cough when we have firms like Bear Stearns around, sometimes I'm not so good at making money cough cough when the XLF has a bear market rally.

 Just a netural side note but George Soro's well Soro's fund managment has a 185k position in EXM that they were in for a couple months at the end of 07 and sold out at the end of 07 (according to SEC filings).

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#12) On May 20, 2008 at 12:42 PM, GS751 (27.69) wrote:

abra, I will give you a rec for this thread, at least some links in here work.  Trust me I have no incentive to provide broken links in my blogs.........

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#13) On May 20, 2008 at 12:59 PM, abitare (33.77) wrote:

GS751,

:) 

Good to hear from you. I own SKF. It is a long term hold. I think the FED is running out of ideas to prop up the stock market before we hit hyperinflation.  The FED might lose its charter under hyperinflation, which is the last thing the FED wants is to lose their private banking monopoly. 

It is going to be a volitile market.  

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#14) On May 20, 2008 at 2:01 PM, abitare (33.77) wrote:

Tastylunch,

I have to give you Recs for the video on SharonaZamboni  blog.

That was so funny!!!!!  

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#15) On May 20, 2008 at 3:14 PM, LordZ wrote:

WOW again I would like for you to say something new about DRYS other than the old news repeated and repeated...

GS ??? I dont know who u are and I dont recall mentioning your name ?

WOW you used some old FORBES data... you used some innacurate Yahoo data...  you post and post the same old crap...

how about some new crap at least...

4 billion in market cap.

Hey im gonna make a prediction :)

I predict your going to repost the same old crap again and again..... your going to cut and snip some old statements probably taken out of context...

How about something original dude ?

I'll refrain from saying anything more about your one sided opinionated views.

 

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#16) On May 20, 2008 at 3:51 PM, abitare (33.77) wrote:

LordZ,

DRYS other than the old news repeated and repeated...

Curious George was posted in  02.25.08, 12:00 AM ET

The yahoo link was from yesterday....

How about something original dude ?

I just called you Kevin James, is there a more original insult?

Okay, beat it you Trogladite Humunculus. Go shill on Yahoo Message board where the corrupt and stupid can preach non-stop idiocy  to each other and to the fools, who would believe it. 

 

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#17) On May 20, 2008 at 4:59 PM, abitare (33.77) wrote:

Trogladite Humunculus,

Go shill on Yahoo Message board where the corrupt and stupid can preach non-stop idiocy  to each other and to the fools, who would believe it.

I provided four inks, showing how stupid and shady this company is. Forbes, Yahoo, Barrons and Fool. You provided the company website?

Lol, thank you for the laughs. It is important for the Fool community to weed out the suspects.

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#18) On May 20, 2008 at 5:45 PM, Imperial1964 (97.77) wrote:

LordZ:  "obviously you are too full of crap and too biased."

Hahaha!  Freudian Projection is sometimes rather amuseing.

Bear markets aren't usually kind to arrogant bulls.  We'll see how loud LordZ is now that this rally is coming to an end.

Abitare, I enjoyed the Youtube video.

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#19) On May 20, 2008 at 7:41 PM, Tastylunch (29.20) wrote:


I have to give you Recs for the video on SharonaZamboni  blog.

That was so funny!!!!!

 It was a tossup between that or "My Sharona", figured ye old Zamboni Hockey song was a safer bet. :-)

I aim to please.

Somehow I don't think she found it as funny as we did though. :-)

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#20) On May 20, 2008 at 8:34 PM, abitare (33.77) wrote:

Tastylunch

That was so funny, I showed it to the girlfriend here.

Imperial1964,

good times here always. 

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#21) On May 20, 2008 at 8:37 PM, abitare (33.77) wrote:

Imperial1964,

I learned something new today. ty  

I will file Freudian Projection  in the memory bank

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#22) On May 20, 2008 at 9:31 PM, thebigjigga (< 20) wrote:

LordZ, You have no idea how much money I have nor how much money I have gained through investing, so please take your childish remarks back to the Yahoo Message Boards from where you came.

My CAPS rating just shows you a glimpse of the success of my real life portfolio.  Yours on the otherhand leaves nothing to be desired.  You are a newbie investor who has had some luck with a few stocks, but in the end the market is going to take it all away from you, it loves to feed on new blood and your the ripest target.

Nobody here wants to know how much you made (or lost) today.  You can join the cesspool over at Yahoo Finance with that, but no one wants to hear that shit here.  This is the internet, anyone can say whatever they want.  The important thing is to have FACTS that can back it up.  You have nothing.

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#23) On May 21, 2008 at 11:57 AM, abitare (33.77) wrote:

LordZ,

What did I tell you about counting your money when you are sitting at the table?

The summer has just begun. Check back in October, we will see how well this FED juiced market holds up. 

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#24) On May 21, 2008 at 11:19 PM, LordZ wrote:

One solution ... gold and oil.....

its going to be a good summer for gold and oil.....

 

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