Buy the Rumor, Sell the News

Marine Money’s Fourth Annual Ranking Issue

This year marks the fourth consecutive year that we have completed a major comparative ranking of the results of both public and private shipping and shipping-related companies. Perhaps most notable for 1993 on a macro level is the remarkable consistency of the industry’s physical asset performance when measured against 1992. “Stable and unexciting,” one owner called the results. This, of course, reflects the continuation of the global recession as much as anything and its impact on shipping. Despite the rather bland financial performance by the industry’s physical assets, 1993 was a remarkably good year for many of the industry’s share prices.

In essence, 1993 was a year when the industry’s financial assets were more attractive than their physical assets. Before looking at just a few examples of the many interesting stories to be found among the numbers, we asked ourselves and others just why 1993 saw such a disparity between share price returns and physical asset returns. In effect, stock markets act as leading indicators anticipating recovery. Stock markets can be expected to be six to nine months ahead of the curve, where shares are sold on a whisper: “Buy shipping because when the world comes out of a recession, goods move and they move on ships.” Generally, it is after shares have begun to move that sell side research steps in. Research further spreads the word, and that is when the investment bankers enter the picture with deals.

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