Boat Gambling

For the past two years ocean shippers have had the wind behind them. Their vessels will carry 4.6 billion tons of oil and dry bulk cargo (iron, coal and so on) this year, up 10% since 2002, while container traffic will increase 23% over 2002 levels, says Clarkson Research Studies. All categories are expected to keep growing in 2005.

Given the inflexibility, at least in the short term, in the supply of ships, that uptick in demand translates into a huge gain in profitability for shipowners. This year’s net income at shipowner OMICorp. should be up better than tenfold from two years ago. Share prices are
up, too, although not as steeply. Standard & Poor’s index of maritime stocks has risen 83% since 2002 versus 29% for the S&P 500.

The party isn’t over, says Mark Coffelt, chief investment officer at First Austin Capital Management. He began buying tanker stocks a year ago for his $43 million Texas Capital Value Fund. He isn’t about to jettison his holdings.

Full story at Forbes.com

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Cradle To Cradle To Washington

WASHINGTON, D.C. – Last month’s U.S. election results elicited the predictable laments from the enviro crowd. “The re-election of President George W. Bush means that polluters will enjoy four more years of lax enforcement,” moaned the Natural Resources Defense Council.

But the political winds don’t seem to ruffle one prominent environmentalist: William McDonough, a 53-year-old architect and man dubbed a “hero for the planet” by Time magazine in 1999. “We don’t focus on politics, because they come and go,” McDonough said in a phone interview last week, adding, “Republicans are very attracted to what we do.”

Indeed, last January, McDonough was back at the White House, where he had previously accepted an environmental award from President Bill Clinton, expounding his ideas on ecologically sustainable design to a meeting of government officials arranged by Bush’s Office of Management and Budget. “We’ve met with many of the departments and agencies many times since,” McDonough says.

The subject of those meetings is what McDonough calls “Eco-effectiveness” and “Cradle to Cradle Design.” In short, it’s an effort to refashion architecture and industry so that they emulate the ecosystems found in the natural world.

Full story at Forbes.com

Big Bets

Every Autumn we have 17 equity experts–some bulls, some bears–test their mettle against the S&P 500. They get one pick and 12 months to either beat or lag the index. Those who succeed stay in the contest for the next round. Only a handful of the experts from our recently concluded contest have reason to brag. On average the five shorts skidded past the market’s 8% rise since October 2003 with a 55% gain. Bearish pick Research in Motion, which rose 300%, did most of the damage.

Nor did the bulls deliver. Their 12 picks collectively finished in the black but still fell shy of the S&P 500′s advance by three percentage points.

The best among the bears was Clarion Group’s Morton Cohen. Last year he warned of trouble at Bradley Pharmaceuticals, which fell 38%. For 2005 he puts the finger on Travelzoo, an online aggregator of travel deals. It’s an easy business to get into, Cohen says. He thinks that Travelzoo faces threats from upstarts below and giants like Yahoo above. And the stock doesn’t look cheap at 90 times projected 2005 profits.

Full story at Forbes.com

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