Courage Marine: BDI plunging.

Yesterday's Business Times reported that the Baltic Dry Index (BDI) fell to an 11 month low. Today, it fell another 3.799% to 1,013.

The decline is attributed to a worsening glut of ships. Rates are now below operating costs in the Pacific Ocean.

Capesizes, the largest dry bulk carriers cost US$7,437 a day to operate (excluding fuel). However, rates on round trip voyages in the Pacific fell to US$6,471 a day, down 80% from a month ago.

Seasonal decline in demand to ship commodities to China, port disruptions in Australia after a recent cyclone and a larger number of ships will continue to exert downward pressure on rates in the short run.

My investment in Courage Marine late last year at 10c a share is now underwater. What do I plan to do? Nothing. Why?

Courage Marine is a company with a strong balance sheet and I doubt it is going to sink. It might not do well but it will most probably survive the bad times.

For those who are thinking of possibly investing in Courage Marine, there could be a better time to do so. For those who are already vested, we have to ask if we run the risk of selling at the bottom if we exit now.

With my investment in the company accounting for only some 1.5% of my total portfolio value, I will simply hold on.

Investing in financially sound companies, I am able to stomach paper losses which are likely to be temporary in nature.

Related post:
Courage Marine: Bought more at 10c a share.

Courage Marine unit disposes MV Raffles for $4m
Wednesday, 18 January 2012

© 2012 - The Edge Singapore

Tea with AK71: A lunch of barley and winter melon.

I have blogged about how I would boil barley water and later eat the barley for a meal as well. Today, I brought to work a container of barley and winter melon strips drenched in soya bean milk.

My sister boiled barley water over the weekend and she was going to throw away the barley and winter melon strips. I asked her to keep them for me in a container so that I could bring to work for lunch. She kindly obliged.

This morning, I poured soya bean milk into the container and, voila, that's my lunch for the day!

Barley has been described as a nutritional powerhouse that has a low glycemic index (GI). It is high in fiber, naturally low in fat and cholesterol free. It contains vitamin Bs, antioxidants, selenium, iron, magnesium, zinc, phosphorus, potassium and copper.

A healthy meal and it costs next to nothing!

Related post:
Tea with AK71: A simple meal.

Mr. Lee Kuan Yew on the eurozone crisis.

I just received the latest copy of Alumnus in the mail and on page 4 is a one page write up on what Mr. Lee Kuan Yew said during LKY School of Public Policy's 7th Anniversary. He said something about the eurozone which got me interested enough to search for more details online.

The one liner that got me interested was: "Mr. Lee thinks European leaders will try very hard to prevent the collapse of their currency union but he does not believe they will be able to keep it going." So, does he think that the eurozone will ultimately dissolve?

Searching the internet, I found a website with the details:

... European leaders will try to save the euro zone from collapse, because a collapse of the currency union would be “an admission that their aspiration for one Europe is not achievable”.

.......

“A fundamental problem of the euro is that everybody, every European country, march to the same drummer whereas each country has its own tempo and you cannot expect the Greeks to march like the Germans, so the problem will not go away”.

Therefore, he added, “a two-tier Europe or even a three-tier Europe is possible but a one-tier Europe with different spending habits, thrift habits and discipline is too difficult to achieve”.

The euro came into existence in 1999 with the aim of increasing economic cooperation and growth in Europe, and upping Europe’s presence on the world stage.

With the recent debt crises, the currency union forces other European countries to bail out troubled  members and policymakers are denied the flexibility of monetary policy as a tool to fight recession.


Read articles: here and here.

So, will the eurozone go the way of the Dodo? If it will, when will it happen? 

Your guess is as good as mine. 

One thing is for sure, Mr. Lee Kuan Yew has spoken and I will take note.

------------------------------

Seven eurozone countries had their ratings confirmed while nine were downgraded by S&P on 13 Jan (Friday). It downgraded France's top AAA rating by one notch to AA+, with a negative outlook while  Italy went down by two notches to BBB+, negative outlook, and Spain was also down two notches to A, negative outlook.

Read article: here.


BREXIT!

Updated on 25 June 2016: Prime Minister David Cameron is to step down by October after the UK voted to leave the European Union. Speaking outside 10 Downing Street, he said "fresh leadership" was needed. The PM had urged the country to vote Remain but was defeated by 52% to 48% despite London, Scotland and Northern Ireland backing staying in. (Source: BBC)

The UK is likely to lose its AAA credit rating after it voted to Leave the EU. Moritz Kramer, chief ratings officer for S&P, said on Friday morning that the UK's AAA rating was “untenable under the circumstances”. German daily newspaper Bild quoted Kramer as saying: “If Great Britain decides for a Brexit in the EU referendum on Thursday, then the AAA credit rating would come due and would be downgraded within a short period of time.” (Source: Independent)

Related post:
Stakeholders should worry as credit is tightening.