There is a reason why I recommended The Shipping Man by Matthew McCleery. People buy into the oil tankers stocks without doing much due diligence. They have no idea what they got themselves into.
The shipping sector is extremely volatile in term of daily rates and stock prices. Opinions change daily. Two weeks ago, there was a storage problem. Last week, there was no storage problem. Yesterday, there was a storage problem. Today, there is no storage problem.
Two weeks ago, the oil tankers were sold off because the rates were too high. Last week they were sold off because the rates were falling. Yesterday, they were bought who knows why. Today, they are being sold off because the rates are falling. If the rates continue to fall, the stocks will be sold off because the rates will be too low. They will not be bought because the rates will increase again.
You see my point? Oil tanker stocks are bad when rates are high. They are bad when rates are medium. And they are definitely bad when rates are low.
Even though you might read positive comments, the sentiment is extremely bearish. This is why you should read The Shipping Man. It mentally prepares you for this sector is all about – constant change.
“Things are always changing in shipping, like the tide. And even if they do not change, that is a change for the people who were expecting a change.”