Thursday, November 13, 2008

More On DRYS

The BDI went up 1.7% last night. The Index seems to have somewhat stabilized, after a month of going down every day. The prices of shippers like DRYS have been assuming a worst case scenario (global shipping completely freezes) but even CSFB has noted that if all of their contracts disappear, a sum of the parts on DRYS still values it at $16. They currently have a price target of $30 on it.

Again in this environment, value and price targets and sum of the parts analysis in meaningless. But in 2002 that was the case also and anyone buying in the June-October period then, despite feeling enormous pain when the market cascaded down in late September and early October, ended up very well in the end.

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