May your holidays be bright and merry.

This quick post is an open response to the kind comments and questions from gullipalli regarding my last post, Heading Into Port.

Would I put my retirement money in high dividend paying shipping stocks?

Yes, indeed! I have a very conservative 401K, all mutual funds anchored by Fidelity Spartan Total Market Index (FSTMX) and Fidelity Spartan International Index (FSIIX). No load and low fees are the way to go. Put your money in every payday and forget about it. On the other hand is my Roth IRA. That's where I have my fun. 100% shipping stocks and will never have to pay taxes on the dividends. Trade as often as you like. Everyone who earns any income at all ought to have a Roth IRA, it's a great deal.

High dividend paying (shipping) stocks with principal as safe as MO or DEO?

By principal I assume you mean a stable stock price and a company that will last. No stock or anything in this world is risk free and unchanging but some appear to be so more than others. Diageo (DEO) has been around for 250 years or so and Altria Group (MO) for about 150 years, under different names. The highest paying dividend stock in Crow's Nest is Aktieselskabet Dampskibsselskabet Torm (TRMD). It's dividend right now is more than twice Altria. The Danish company that operates both product tankers and dry bulk has been around since it acquired it's first ship, the s/s Alice, in 1889. The company has gone thru both good and bad times, including a couple of world wars, but it's still here and I believe a great investment. With shipping companies you have to expect a lot of volatility and wild price swings. It takes a while to get your sea legs, just keep you eyes on the horizon.

Enjoy life and beware sea hags underneath the mistletoe.

Robert

May peace be with you.

This is a open reply to the open reply from VikingWarrior in regards to my last blog, Pirate Tales.

#1. Why don't I have more Tsakos Energy Navigation (TNP) in the Crow's Nest portfolio of maritime shipping companies? The fact is I did have a larger position but decreased it a month or so ago because of my short-term thinking.

It's recent large gains, I believe, were due to a better than expected third quarter earnings report. Barring insider knowledge or a working crystal ball there was no way for me to foretell this.

I agree with you on the advantages of Tsakos having ice class ships in the fleet. About half of it's young, diversified fleet is ice class. All told, I think Tsakos is the best tanker company out there. It's an excellent long term investment.

#2. The Northwest Passage isn't being used by commercial shipping yet. There are many problems to be dealt with first, political and environmental. Canada believes that much of the passage lies within it's territorial waters and therefore wants to control, regulate, and tax traffic passing thru. Look at a map of the Northwest Passage and it is easy to see why they believe this.

I am astounded, astonished, and ashamed that the United States is ganging up with the Russians and others in asserting that the passage is an international waterway and therefore freely open to all ships of all nations. The only reason I can see for this is undue influence on our government by a few short-sighted corporations who stand to profit from it without regard for safety or the environment.

One example of thousands of possible scenarios: Suppose that because of the lack of regulation, an old, poorly maintained, half-crewed super oil tanker belonging to private individuals or some third world government spills it's cargo in the passage, forever destroying part of the fragile ecosystem. Will that be an "international" problem? No, it would be a Canadian problem. They know it, and we know it.

And what about their national security? Canada allowing the Northwest Passage to be open international waters would be akin to the U.S. allowing Russian or Chinese submarines in our Intracoastal Waterway or Iranian destroyers on the Great Lakes.

If the Northwest Passage continues to open up due to a warming climate allowing vessels to pass through freely, everyone wanting to use it would be best served to have it well regulated and protected by the Canadians. They are our best friends and closest allies. Rather than ruin our relationship (and the Northwest Passage), we ought to be helping the Canadians and supporting their efforts.

My recommendations: buy Tsakos Energy Navigation (TNP), it is the best of the tanker companies, and help make commercial navigation through the Northwest Passage a reality and safe for all by supporting Canada's sovereignty.

"A Mari usque ad Mare" (From sea to sea)
Canada's motto.

Robert

May those frightened cease to be afraid, and may those bound be free.

My Crow's Nest portfolio of maritime shipping stocks has been slapped silly the last five days with the NAV dropping from $13.95 to $12.32. Just today (11-05-07) I lost 5.44%.

Why? The news has been good news and the fundamentals haven't changed. No ships have gone down in storms, hurricanes, typhoons, or tsunamis. The only ship captured by pirates was a North Korean vessel off the coast of Somalia on Friday. The North Korean crew regained control of their ship and the U.S. Navy destroyed the two pirate skiffs so they would not be used again. Business is good.

Seems like the panic is due to the Chinese trying to manipulate prices for shipping iron ore, investors not being able to stomach the volatility that has always been part of this sector, and lots of profit taking after a great year.

I expect to finish out the year OK. In a few weeks the iron ore shipping soap opera will have run it's course. In the end, the Chinese will pay the going market rates if they want to or not. They need raw materials. The dragon must be fed. The sector is better off not having too many investors who get sea sick watching the ups and downs of stock prices. And it's alright to take profits, just don't fret too much when the stock you sold rebounds and continues it's upward climb.

Some changes were made last week in hopes of helping the portfolio do better in the next two months. They were:

Selling Omega Navigation Enterprises, Inc. (ONAV), Danaos Corporation (DAC), and Seaspan Corp. (SSW), all at a loss. All great companies, I just don't see them moving much by the end of December.

Decreased position in Euroseas, Ltd. (ESEA) to 6% of the portofolio.

Increased positions in Diana Shipping Inc. (DSX) to 11%, Quintana Maritime Limited (QMAR) to 11%, Golar LNG Ltd. (GLNG) to 9%, and StealthGas, Inc. (GASS) to 6%.

Happy sailing and good luck too all.

Robert

The Liner she's a lady, an' she never looks nor 'eeds--
The Man-o'-War's 'er 'usband an' 'e gives 'er all she needs;
But, oh, the little cargo-boats, that sail the wet seas roun',
They're just the same as you an' me, a'-plyin' up an' down.
- Rudyard Kipling, The Liner She's a Lady

A small one on the internet is the Midway Dead Pool. It's rules are simpler than most. In December send in your $20 and list of 10 celebrities you think (hope) might die in the following year. You get points for each one who dies. 100 points minus their age at the time of death. The winner gets 80% of the pot and the runner-up gets 20%. Looks like there are 21 players for 2007 and the winner will get $340 for a gain of 1600%. That's a better return than your average Chinese Stock and Apple combined.

So far this year the most picked celebrity who died and earned points for the players was Tammy Faye Messner. She died in July and was worth 35 points. Because she was very sick and looked it, she was a popular choice. Another common pick who also passed in July was Lady Bird Johnson. Because of her age she was only worth 6 points. A more valuable pick that started her dirt-nap in February was Anna Nicole Smith. Addicted to drugs and alcohol and having numerous sexual partners apparently without the use of condoms she was a logical choice and was worth 61 points. One lucky player has all three of these ladies on her list and is in the lead with only a few months to go.

I'm surprised that I didn't see Britney Spears on anyone's list. She's only 25 years old (big 75 point value), seems more than a little ditzy, is addicted to drugs and alcohol, divorced, and every time you see her on TV she's behind the wheel of a motor vehicle. I thought she'd be the Google of Dead Pool investors this year.

Why do I bring up this insanity here?

Because I see on the Strategy Lab Open web site that the fifth most invested in stock by contestants this past week was UltraShort S&P 500 ProShares (SDS). Seeing that instantly brought Dead Pools to mind. They have so much in common.

With any UltraShort Proshare you're not really investing in something; you're gambling, betting against somebody's good fortune. It's an anti-investment. You can only win if someone else loses. According to the current prospectus the fund's investment strategy is taking positions in financial instruments including derivatives and employing leveraged investment techniques. For a net annual fund operating expense (fee) of only 0.95% you subject your investment to "Aggressive Investment Technique Risk, Credit Risk, Early Close/Trading Halt Risk, Liquidity Risk, Market Price Variance Risk, Market Risk and Non-diversification Risk."

Wow, what a deal. You're afraid that bad times are coming, a correction or crash is only a matter of time. You've got to have a hedge. There's easy money out there. You deserve it. "Money for nothing, chicks for free." Me. Me. Me.

Even in bad economic times there are great companies out there that will still have positive returns. Maybe it's more challenging to find them but I just believe that investing in something real that may provide a win-win for all involved is so much better than betting that others will fail. It's not just how much money you make, it's how you make it. Life is too short to be sitting around eagerly reading the obituaries or impatiently waiting for the next stock market crash.

Peace, love, and Happy Halloween.

Robert

May every life be replete with joy.

Yesterday and today I rearranged, reshuffled, readjusted, and messed with my Crow's Nest portfolio of shipping stocks.

What did I do?

Increased positions in TBS International Limited (TBSI), Euroseas Ltd. (ESEA), & Quintana Maritime Limited (QMAR).

Decreased positions in Danaos Corporation (DAC), Tsakos Energy Navigation Limited (TNP), StealthGas Inc. (GASS), Aktieselskabet Dampskibsselskabet Torm (TRMD), & Seaspan Corporation (SSW).

Added two new positions: OceanFreight Inc. (OCNF) and Omega Navigation Enterprises, Inc. (ONAV).

Let the others be.

The end result of all this was to increase the portfolio's exposure in drybulk shippers and lessen it's exposure to tankers (crude, product, & gas) and container shippers.

Why?

Drybulk shippers are enjoying the highest shipping rates ever and all the variables that affect them have lined up in their favor. Those include more demand for ships than existing supply, port congestion, and an insatiable demand for the cargos they ship all over the world.

Tanker rates are at four year lows and the variables that affect them are constantly changing and often unknown. Those include the price of oil and it's effect on demand, the weather, and politics.

Container rates are more stable, more linked to global GDP, and don't have much of a spot market.

I would recommend any of the shippers in Crow's Nest portfolio to other SLO players. I believe each has enormous potential and that they represent the best from a great sector.

What's more, all ships are beautiful things.

Robert

May you find happiness and keep it forever.

The shipping container was one of the most important innovations of the last century. They can be carried, sealed and loaded, on containerships, trucks, railroad cars, and planes. They've been carried by ships for about 50 years. Thanks to the shipping container there is more world trade, and it is more efficient and costs less.

If you woke up tomorrow morning and all the Apple iPhones, colorful Crocs shoes, and Starbucks frappuccinos in the world disappeared into thin air, would it really matter? Most of the world's people wouldn't even notice.

If you woke up tomorrow morning and all the containerships in the world were gone, most of the economies in nations on six continents would decline or collapse, trade would slow to a trickle, and many people would begin to starve.

My point is that certain things really matter and cannot be done without. The companies that provide these essentials are what I prefer to invest in.

In Crow's Nest portfolio of maritime shipping companies there are two stocks of companies that own containerships exclusively. They are Seaspan Corp. which I blogged about on August 8 and Danaos Corporation (DAC). Both are up about 40% YTD. Unfortunately, I bought them both at their 52 week highs when the SLO contest began and, as a result, am losing money on both. Danaos has the largest loss, about 8%, since then. Still it remains one of my top tier investments for many reasons.

Danaos has a similar market cap to Seaspan, about 1.8B, and comparable debt/equity ratio, near 1. But Danaos has a low PE of only 8.9 and a ROE of more than 40. The company owns 33 ships with 30 more scheduled for delivery between now and 2011.

Danaos' strengths include long standing relationships with the world's leading liner companies and stable cash flows through long term charters. The company is headquartered in Piraeus, Greece and has chartering offices in Hamburg and crewing departments in Odessa, Ukraine.

It's experienced leaders are committed to customer service and technological leadership.

Looking for another stock for your SLO portfolio? Danaos Corporation (DAC) is recommended as a moderate buy by analysts and is still off it's July highs. Oh, I almost forgot the dividend yield of more than 5%.

Robert

May you find true and lasting happiness!

Yesterday we sold our position in Tidewater Inc. (TDW) for about a two and a half percent loss. We sold it simply because the company didn't fit in well with the rest of Crow's Nest. Tidewater is basically a oil service company while all the other companies in the portfolio are trans-ocean shippers of cargo. Tidewater is a great company with strong fundamentals.

Tidewater had by far the largest fleet (454) and market cap (3.7B) of any company in Crow's Nest. Now that it's a memory, our largest company is Aktieselskabet Dampskibsselskabet Torm (TRDM) (2.7B) closely followed by DryShips, Inc. (DRYS) (2.6B). Eight companies have market caps from 1B to 1.9B. The remaining 3 have market caps less than 1B, the smallest being Euroseas, Ltd. (ESEA) (263M).

We've shifted around some of the allocations. A higher percentage will be going to Dryships and Excel Maritime Carriers, Ltd. (EXM), less to Euroseas and Torm. The shifts were made based on fundamentals and giving more share to dry bulkers as opposed to tankers, gas carriers, and container ships. We believe dry bulk rates will continue to be extremely strong and that that sector will continue to beat the others.

The importance of shipping to world trade cannot be overstated. A very small percentage of the world's merchant ships are owned by publicly traded companies. These companies should do well for at least the next few years and we expect to profit handsomely from them.

Robert

May you know only happiness.

Today I'll blog on two of the tanker companies in Crow's Nest portfolio of shipping companies. Tankers are bulk cargo ships that transport liquids(wet bulk), such as crude oil, petroleum products, liquefied petroleum gas, LNG, and chemicals.

Tsakos Energy Navigation Ltd. (TNP) announced today that it took delivery of a new ice-class handysize product tanker bringing it's fleet to 44 with another 8 vessels in it's new build program. This diverse fleet (about half ice-class) consists of 27 crude transporters ranging from VLCCs to aframaxes and 24 product carriers ranging from handysize to aframaxes; and one LNG (liquefied natural gas carrier). This diversified fleet can better avoid market cycles. TEN Limited is incorporated in Bermuda and managed out of Athens Greece. Growth, professionalism, a low P.E., and dividend over 4% were factors in picking Tsakos for inclusion into Crow's Nest.

Aktieselskabet Dampskibsselskabet Torm (TRMD) owns vessels consisting of 31 product tankers and five dry bulk carriers. The company also charters six product tankers and seven drybulk carriers and manages approximately 46 vessels for third-party owners and charterers. TORM was founded in 1889 and is headquartered in Copenhagen, Denmark. TORM operates by it's pool partner concept - pool together ship-owners to provide one-stop shopping for it's customers. TORM has the largest market cap (2.5B) of any company in Crow's Nest except for Tidewater Inc. (TDW). TORM has a very low P.E. and a very high return on equity.

FYI: Tanker ship types by size (small to enormous):
Handymax - go places the bigger ships cannot go.
Panamax - max size for Panama Canal.
Aframax - Average Freight Rate Assessment Size.
Suezmax - max size for Suez Canal.
Capesize - have too travel around the capes (too big for the canals).
VLCC - very large crude carrier.
ULCC - ultra large crude carrier.

Tomorrow I'm selling Knightsbridge Tankers Limited (VLCCF). It's ships are getting older, and it's dividend and income growth are declining. I'm not sure yet where I'll put the proceeds. Maybe I'll spread it around some of my more promising drybulk companies.

Robert

May you have more love in your heart and less water in your grog.

Drybulk carriers as well as the rest of the shipping industry are taking a savage beating in the stock market. This despite rates for vessels carrying dry bulk cargoes such as iron ore, coal and grain being at their highest levels ever. The companies are also consistently reporting better than expected quarterly results.

An excellent overview of the drybulk industry can be found here: Drybulk Carrier Industry Overview.

As promised I'll blog on a few of my initial stock picks. Three of the seven drybulk carriers in Crow's Nest Portfolio of 15 shipping companies are:

DryShips, Inc. (DRYS) A Greek company that acquires and operates second hand drybulk carriers across the size spectrum, including large (Capesize), medium (Panamax) and small (Handymax and Handysize), and employing them in a combination of "spot charter", and "period time charter" contracts and pools. It has 33 ships in it's fleet plus two newbuildings and this month entered into agreements to acquire 8 more ships (3 second hand and 5 new builds). This mid sized company was picked because it is well run and growing.

Euroseas, Ltd. (ESEA) A Greek company formed by the Pittas family that operates drybulk and container ships. This week the company took delivery of two second hand (built in Korea, 1990) container ships bringing it's fleet to 13 vessels: 2 Panamax drybulk carriers, 2 Handysize drybulk carriers, 1 Intermediate container ship, 5 Handysize container ships, 2 Feeder container ships and a multipurpose dry cargo vessel. Euroseas employs its vessels on spot and period charters and through pool arrangements. It's fleet is the oldest in Crow's Nest but they believe that lower vessel operating expenses give them an advantage over other shippers. This small company was picked for it's great fundamentals and high dividend.

Genco Shipping & Trading Ltd. (GNK) This New York based company's fleet is growing from 19 ships to 34 through acquisitions from companies within the Metrostar Management Corporation group and affiliates of Evalend Shipping Co. S.A. Genco is positioned to expand its deadweight tonnage by approximately 185%. The size of their ships range across the spectrum. This mid size company has a good dividend and is rapidly growing. All of the vessels in Genco's current fleet are currently on long-term time charters.

Analysts rate all three companies as Moderate Buys.

Robert

May you live in a blissful world.

Crow's Nest was down by another 3.something percent today and ended with a NAV of $9.14. Ranked toward the bottom at 1685. ALL 15 of my stocks were down today. ALL 15 of my stocks are losing money since inception. But we are never the less confident of sailing up in the clouds come December.

An English proverb says that a smooth sea never made a skilled mariner. Since this contest started it's been hurricanes, typhoons, cyclones, and tsunamis. But we are still afloat and building steam. Clear the way, we'll be passing through.

Starting with my next blog I'll briefly continue to profile two to three of my initial 15 picks until I've mentioned them all.

Robert

May all the barnacles on the side of your ship turn into birds of paradise and peace.

The stock market has been going up and down, up and down, for the last week. Crow's Nest and the shipping industry have been going down and down, down and down. The Dow ended up 2.18% today and the S&P was up 2.42%. Ummm, I was down 2.95%.

So, last Thursday I was bemoaning Crow's Nest NAV of $9.96 and being in 1585th place in the contest. Well ... Friday my NAV was down to $9.72 and I was in 1640th place. Today's NAV ended up (I mean down) at $9.43 and I can only go down another 133 spots in the ranking before scrapping the bottom. But we're only a little more than a week into a five month journey and there's no where to go but up.

I'll blog on my stock that went down the most today, a 9.66% drop. Seaspan Corp. (SSW). Seaspan, one my third tier investments, is one of two containership companies in the Crow's Nest portfolio. The other is Danaos Corp. (DAC). Seaspan owns 29 containerships with another 26 on order. Their customers are some of the world's largest liner companies including Denmark's A.P. Møller-Mærsk A/S and China's COSCO. Their dividend yield is now more than 5%. They have an experienced management team and though it's a Marshall Island's Corporation it's really a Canadian/Hong Kong operation with crews from India. The shipping industry is truly international. The company has good fundamentals and great growth and there was no reason for the beating it took in the market today. By the time this voyage is over I expect SSW to be up, up, and up to the Crow's Nest.

Robert

May you have fair winds and following seas.

Today the leader board was up and running on the Marketocracy web site. Out of a possible 1772 funds, Crow's Nest was rated 1585. 1585. I'll say it one more time, 1585. What could be better than starting off in the bottom 10%. A challenge! To quote Adm. D. G. Farragut: "Damn the torpedoes! Full speed ahead!"

Well, maybe not full speed. Crow's Nest made a couple of dollars today, literally. No change in NAV, $9.96.

Tonight I'll blog about Quintana Maritime Limited, (QMAR). It's one of my third tier picks. Another Greek drybulk carrier, they have 29 ships with another 8 on order. Their young (4.2 years average) fleet is about half Panamax and half Kamsarmax. The eight newbuildings are all Capesize. Despite a higher than average P.E., Quintana has excellent growth in sales and income and a dividend yield of 5.5%. They have stable cash flow from well-established and reputable charterers, Bunge S.A. being their biggest customer.

FYI: Panamax are the largest ships that will fit through the Panama Canal, 60,000 - 80,000 dwt. Kamsarmax are a little larger at about 82,000 dwt. for Port Kamsar in Equatorial Guinea. Capesize are 80,000 - 200,000 dwt. That's big!

Robert