|Short shipping cycles||5|
|Long shipping cycles||6|
|The return on investment in shipping||6|
In short, shipping cycles, like shipowners, are unique. In each cycle supply lurches after demand like a drunk walking line that he cannot see very clearly. The market cycles dominates shipping risk. Although the existence of cycles is undisputed, their character is episodic rather than regular. Against this background, predicting cycles is difficult, but not impossible for a skilled player.
So for measuring shipping risk it does not make sense to talk about the return on investment in shipping without also referring to the risk the investor takes. Investors do not take risk for fun, they are playing witch real money. The risk taken the equity investor is the uncertainly about what it will be worth at any point in time, combined with the risk that lose his investment. So it appears that the shipping industry is a high risk business.
Risky trades in which there is an element of romance often become so overcrowded that the average earning in it are lower that if there were no risk to be run.
Enter an email address where the link will be sent:
Link to paper: