The Intelligent Investing Podcast

#85: Coronavirus Investing Series, Part 4 | Braxton Gann | Shipping Companies

This is Part 4 of a special Coronavirus Investing Series. If you have not listened to Part 1, please click here to get the overall context/market overview during this unprecedented time.

You can also listen to:

• Part 2
• Part 3

 

Overview

After a decade of bankruptcies, shipping investors are fed up. The shipping ETF was shuttered a month ago, and the carnage prompted Morgan Stanley and JP Morgan to drop coverage of the entire sector. Investors fear that Covid-19 will crush oil demand, and plummeting oil prices will result in tanker demand evaporating - potentially resulting in bankruptcies. However, tanker companies have used windfall profits to pay down debt, and some are now on solid footing.

 

Halts In Air Travel

As lockdowns spread and air travel grinds to a halt, oil consumption is collapsing, but Braxton says that's good for tankers because what oil isn't getting burned is going into storage on tankers, which were already in short supply.

 

Scorpio Tankers

Braxton discusses Scorpio Tankers, which trades at 35 cents on the dollar of liquidation value. Scorpio owns the youngest product tanker fleet of any public company. The product tankers built during the last boom are starting to turn 15 years and older, either trading in a second-tier market or moving into dirty trades. At the same time, new environmental regulations significantly boost the demand for product tankers to carry MGO and other compliant fuels.

 

Other Tankers

Braxton mentions several other tanker companies he owns, including Euronav, a prominent owner of crude tankers. Despite the strongest balance sheet in the industry and a policy of paying out 80% of net income as dividends, Euronav trades at two-thirds of liquidation value.

 

IMO 2030 & The Shipbuilding Industry

In the show, Braxton explains why he finds the shipbuilding industry unattractive, and how IMO 2030 may put a damper on new ordering.

 

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#82: Coronavirus Investing Series, Part 1 | Jeremy Raper | General Market Overview

This is Part 1 of a special Coronavirus Investing Series.

Overview

In this episode of The Intelligent Investing Podcast, Eric Schleien sits down with Jeremy Raper to discuss a general market overview during this coronavirus pandemic. We discuss 3 baskets of places to start looking and researching to find potential investment opportunities.

Staying In Touch With Eric Schleien

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Staying In Touch With Jeremy Raper

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#69: Braxton Gann; Shipping Companies; IMO 2020

In this episode of The Intelligent Investing Podcast, Eric Schleien sits down with Braxton Gann to discuss two shipping companies, Scorpio Tankers (STNG) and Diamond S Shipping Company (DSSI). 

Overview

A lot of managers are concerned about the "trade war" because less trade = less shipping. Braxton thinks that a trade war is a positive because the trade will be less efficient, increasing ton-miles.

 

Some investors also worry that a global recession will send these shipping companies into bankruptcy, forgetting that new supply would be cut off by a recession, and that obsolete vessels would be scrapped mercilessly.

 

There has been a lot of talk about OPEC cutting production being a negative for STNG, but STNG carries products, not crude. Saudi Arabia is adding refinery capacity, and the OPEC cuts will have to be renewed in March.

 

IMO 2020

Another puzzle is that shipping companies are downplaying the obvious effects of IMO 2020, which can easily be enforced by spot checks. Braxton thinks this is because most companies can't afford scrubbers, even though they offer payback times of 10 months or less.

 

Another factor that we didn't end up getting to on the show is that many shipyards are going bankrupt, and shippers will have to rebuild their balance sheets for a couple of quarters before ordering more product tankers, which can take a year and a half to build.

 

The Tanker Thesis

 

The main reason Braxton likes product tankers is due to the disruption that will occur from IMO 2020. Many ports don't have the low-sulfur fuels required for IMO 2020, and each low-sulfur blend must be carried in a different tank. Braxton started looking at product tankers when he realized they would be the ones carrying LSFO blends. Inventories of refined products and bunker fuels are surprisingly low, so you could get a double boost from normalizing inventories and arbitrages between ports. This could boost demand by 10% or more, excluding the effect of normal GDP growth.

 

Contact Eric Schleien

If you'd like to connect with me Eric directly, he always loves connecting with listeners of the Intelligent Investing Podcast on his personal Twitter.

You can also connect with Eric on Facebook, Instagram, or through his personal website.

To follow The Intelligent Investing Podcast, click here.

#59: Jan Svenda - Mills Music Trust

In this interview, Eric Schleien sits down with Jan Svenda to discuss Mills Music Trust.

Jan is a “deep value” investor/analyst mainly focused on the US small-cap and micro-cap universe. He started out with a long-only bias (stocks trading close to NCAV etc.) which led to his interest in the OTC world.

Jan covered this space through his exclusive newsletter service where he shared his latest long ideas and a watchlist of OTC stocks which should help subscribers generate material returns and allow them to “monitor” the OTC space more efficiently.

Connect with Jan Svenda

• To learn more about Jan and his manual of OTC stocks, you can visit his website.
•  He can also be reached via LinkedIn.

Connect With Eric Schleien

• Visit Eric Schleien’s Podcast
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• Visit Granite State Capital Management’s Website
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#53: The Oaktree Capital / Brookfield Asset Management Transaction; Brian Langis

Episode #53 of the Intelligent Investing Podcast brings back Brian Langis to discuss the recent transaction between Brookfield Asset Management (BAM) and Oaktree Capital, LLC (OAK). 

Full Link:

https://ericschleien.com/podcast/brian-langis-the-oaktree-capital-brookfield-asset-management-transaction/

 

Connect with Brian Langis: 

Visit Brian Langis' BLOG: https://brianlangis.wordpress.com/author/brianlangis/

Visit Brian Langis' SEEKING ALPHA: https://seekingalpha.com/author/brian-langis

Visit Brian Langis' LINKEDIN: https://www.linkedin.com/in/brianlangis/

Visit Brian Langis's FACEBOOK: https://www.facebook.com/brian.langis

Visit Brian Langis' TWITTER: https://twitter.com/absolut_brian

 

Connect with Eric Schleien: 

Visit Eric Schleien's PODCAST: https://www.EricSchleien.com/Podcast

Visit Eric Schleien's TWITTER: https://twitter.com/ericschleien

Visit The Intelligent Investing Podcast's TWITTER: https://twitter.com/investingcast

Like The Intelligent Investing Podcast on FACEBOOK: https://www.facebook.com/theintelligentinvestingpodcast/

Follow Eric Schleien on FACEBOOK: https://www.facebook.com/eric.schleien

Visit Granite State Capital Management's WEBSITE: https://www.GSCM.co

Follow Eric Schleien on INSTAGRAM: https://www.instagram.com/ericschleien/

#52: Brian Langis; Commentary on Warren Buffett's CNBC Interview and Letter

In this episode, Eric Schleien and Brian Langis discuss Warren Buffett's CNBC interview from Monday, February 25, 2019. We also discuss Warren Buffett's letter that was recently released on Saturday. You can find a podcast on the letter, here: https://intelligentinvesting.podbean.com/e/2018-berkshire-hathaway-letter-to-shareholders-intelligent-investing-podcast-eric-schleien/

 

Show Links: 

1) CNBC Full Interview with Warren Buffett: https://www.cnbc.com/video/2019/02/25/warren-buffett-cnbc-full-interview-berkshire-hathaway.html

 

Connect with Brian Langis: 

Visit Brian Langis' BLOG: https://brianlangis.wordpress.com/author/brianlangis/

Visit Brian Langis' SEEKING ALPHA: https://seekingalpha.com/author/brian-langis

Visit Brian Langis' LINKEDIN: https://www.linkedin.com/in/brianlangis/

Visit Brian Langis's FACEBOOK: https://www.facebook.com/brian.langis

Visit Brian Langis' TWITTER: https://twitter.com/absolut_brian

 

Connect with Eric Schleien: 

Visit Eric Schleien's PODCAST: http://intelligentinvesting.podbean.com

Visit Eric Schleien's WEBSITE: https://www.EricSchleien.com

Visit Eric Schleien's TWITTER: https://twitter.com/ericschleien

Visit The Intelligent Investing Podcast's TWITTER: https://twitter.com/investingcast

Like The Intelligent Investing Podcast on FACEBOOK: https://www.facebook.com/theintelligentinvestingpodcast/

Follow Eric Schleien on FACEBOOK: https://www.facebook.com/eric.schleien

Visit Granite State Capital Management's WEBSITE: https://www.GSCM.co

Follow Eric Schleien on INSTAGRAM: https://www.instagram.com/ericschleien/

#51: 2018 Berkshire Hathaway Letter to Shareholders

Warren Buffett released his letter to shareholders this morning. I break it down with my thoughts and go over some of the key highlights.

 

The full letter can be found here: http://www.berkshirehathaway.com/2018ar/linksannual18.html

 

If you'd like to connect with me regarding the letter to discuss more, feel free to reach out!

 

Connect with Eric Schleien:

Visit Eric Schleien's PODCAST: http://intelligentinvesting.podbean.com

Visit Eric Schleien's WEBSITE: https://www.EricSchleien.com

Visit Eric Schleien's TWITTER: https://twitter.com/ericschleien

Visit The Intelligent Investing Podcast's TWITTER: https://twitter.com/investingcast

Like The Intelligent Investing Podcast on FACEBOOK: https://www.facebook.com/theintelligentinvestingpodcast/

Follow Eric Schleien on FACEBOOK: https://www.facebook.com/eric.schleien

Visit Granite State Capital Management's WEBSITE: https://www.GSCM.co

Follow Eric Schleien on INSTAGRAM: https://www.instagram.com/ericschleien/

#43: Eric Schleien & Brian Langis discuss Investing in Cuba

In this episode, Eric Schleien & Brian Langis discuss the merits of investing in Cuba.

Hope you enjoy! 

--

Follow Brian on Seeking Alpha, Twitter, and his blog.

Follow Eric on Seeking Alpha, Twitter, Facebook, LinkedIn, and GSCM.

Disclosure: I, Eric Schleien, have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I also have no investments in Cuba nor plan to have investments in Cuba within the next 72 hours. I recorded this podcast myself, and it expresses my own opinions. I am not receiving compensation for it (other than from any kind of marketing or advertising on this platform). I have no business relationship with any company mentioned in this podcast. I have no business relationships with the government of Cuba.

 

#41: Comments On The Recent Market Correction

Hey guys, it's Eric Schleien. Today's episode I've recorded on Christmas Eve after a recent market correction. No interview today, just my own personal thoughts/commentary. If you're a seasoned investor and not worried about the market correction, this episode is NOT for you. However, if you're a listener who isn't a full-time investor and you're worried or overwhelmed by the recent stock market decline, I think it's crucial you listen to this to help cut through the emotional noise.

Links referenced in this episode:

1. What does it mean when stocks enter a ‘bear market?’

2. Is Holding Cash a Good Idea?

 

Transcript exclusively on SeekingAlpha 

#36: Getting into the weeds on marijuana stocks (we aren't so high on them) + Update on BAM & TSLA

In this episode, Eric Schleien & Brian Langis do a re-cap on Brookfield Asset Management & Tesla. To read the article associated with the podcast, click here: https://seekingalpha.com/article/4211744-getting-weeds?source=all_articles_title

Then, the rest of the episode is dedicated to the marijuana industry and the publicly traded companies poised to benefit. Neither will touch that shit with a 10-foot pole...or bong...or whatever you want to use NOT to touch these stocks that are priced to perfection and beyond. 

What makes this episode unique is that Eric & Brian get very high up into the big picture as well as get right into the weeds with the nitty-gritty details of the industry/environment. Makes for some super interesting discussion. 

You can always follow Brian's articles on SeekingAlpha here: https://seekingalpha.com/author/brian-langis/articles#regular_articles

 

Or you can hit up his blog here: https://brianlangis.wordpress.com/author/brianlangis/

 

A transcript for this episode is now available.

Enjoy!