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Author: howardgt One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 35346  
Subject: Re: 10 year treasuries Date: 12/29/2013 7:36 PM
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Brewer,

Thanks for your honest opinion about the containers. I respect opinions from others that” know what they don’t know”.

Congratulations on your NM call and profitable trade/investment. I also should thank you for getting me into A.F’s stock world.

I first bought NM as an income stock more than 3 years ago. As I continued to follow AF’s cc’s and other shippers, I gradually averaged down and started buying NNA as well. I remember thinking (as prices dropped), “this is crazy, I better stop buying”, but then I remembered John Templeton’s famous quote:

if you wait until your through the tunnel and out into the sunshine, you’ll have to pay a premium price… if you even wait until you can see the light at the end of the tunnel, you have already past the best bargain days.

So I held my nose and continued to average down. I remember listening to one cc (not AF), where the CEO said we don’t worry about NAV’s because when the market turns, asset prices and charter rates will rise quickly. We only worry about being able to maintain our cash flow until the turn. That quote and Templeton’s quote stuck in my mind... so I felt more comfortable holding and adding. First NNA turned (clean tankers), then NM (bulkers), so I added to my still depressed other tankers (TNP, TNK). Now that all tankers and bulkers have moved, I’ve been buying/adding some containers.

I believe in letting my winners ride, so I haven’t taken any profits yet. I’m sort of waiting for AF to sell (raise cash on a secondary at high NM price). But I really should begin scaling out at these bubbly prices (like you).

I feel MIL is sort of like where NM was a few years back. I’ve had a full positions for a while, but I keep adding. And sometimes this averaging down (in the tunnel) can backfire, so the key for me is diversification.

Here’s hoping the bull run continues in 2014 and I don’t have to practice another famous Templeton quote:

Nobody has been able to predict recessions reliably, so the best thing to do is to buy when shares are thoroughly depressed [during recession] and that means when other people are selling.

Howard
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