Friday, June 13, 2008

The Pain in Being Wrong; Or Maybe Just Early

Recently I wrote that it was a great time to invest in the shippers. Stocks I had been watching closely - and seriously considering buying - like GNK, have been devastated. It is true that the Baltic Dry Index is plunging, but apparently it's a temporary thing, so now might be the time to climb aboard.

The index, which measures the cost of hauling freight across the oceans, is down 12% since the beginning of this week alone, and as a consequence, the shipping stocks are getting killed.

Navios Maritime (NM), Eagle Bulk (EGLE), Genco Shipping & Trading (GNK) and DryShips (DRYS) are down between 10% and 20% since then.

But that's actually the good news.

This phenomenon seems to be a repeat of what happened to the dry-bulk shippers between November and January.

What we are likely seeing is a repeat event, according to Natasha Boyden, managing director at Cantor Fitzgerald in New York.

"It's a great buying opportunity," says Boyden.

Position: None yet

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