WneverLOSE

Not the same Seaspan ::) Although the confusion is very understandable, name and logo almost identical, adjacent businesses and common major shareholders.

Where are you seeing this? All I can see is this sentence at the bottom of page 9 of the release: "Seaspan’s fully delivered fleet of vessels has an average age of approximately 5 years and an average remaining lease period of approximately 7 years, on a TEU weighted basis." I see it in that exact line, doesn't it say that the fleet that they have right now (not including ships that are yet to be delivered) is 5 years old ? So could it be that the 5 year figure includes the order book and the 7 year figure refers to lease duration, not ship age? The 7 year figure for lease duration is up from 4, I believe - a huge extension in a short period of time. the 7 year figure I mentioned is from the 2019 Q4 release but I don't know, I'm confused about that, hopefully they will explain what they meant in the call or the annual report , Other than that you are right they extended existing charters quite a lot but sacrificed rates in doing so, high range of the guidance is "only" 11% higher, will have to see how intelligent it was to do so based on how rates do in the coming years. I would like to have seen also a charter coverage chart for the next few years in order to judge rates exposure better although it seems the entire portfolio is pretty much fully booked for the next few years for good and for worse. EDIT : the presentation is live now, the PRO-FORMA age of the fleet is 5 years so now it makes sense, they should have said it better on the earnings release

I don't get it, a year passed and the fleet got 2 years younger vs getting 1 year older. 2019 : 1,023,000 TEU, 123 ships with average age of 7 years (TEU weighted) 2020 : 1,073,200 TEU, 127 ships with average age of 5 years (TEU weighted) What am I missing ? ???

Shipping rates are going down, China Containerized Freight Index -4.3%, freightos -4% While it was known rates will go down the question when had a big importance, if its a real unraveling to lower levels it came much faster than everyone thought in their EOY commentary.

37% if we are being pedantic: 397/1073. The month only began ;D so 37% in 5 months (and 4 days) hopefully we will be comfortable above 40% by the end of the month.

[glow=red,2,300]WOW ![/glow] When opportunity knocks they step up to the plate ! 40%+ growth in 6 months, [glow=green,2,300]Go Seaspan Go ![/glow]

ah OK, I'm the biggest IBKR nerd in the world, biggest position I've ever had and i follow everything (but everything) they do or say ::) so I was shocked you found a way to get the numbers before everyone else haha February gonna be a strong month as Thomas said on the Credit Suisse conference, usually they publish the numbers on the second day of the month (if its a trading day) so probably tomorrow they will get it published.

Where do you see it ????? not published yet wtf i'm checking every 20 minutes and its not live on the IR website or in a press release EDIT : maybe you are looking at the January numbers and wrote 203% vs 223% actual number ?

As I expected, nothing about controversial stuff like record margin loans by investors, the gamification of investing by brokerages, retail frenzy, SPACs, questionable business models, market valuation, how much gamestop he owns ::) etc.

Yes, and remember it is after all just an estimate : Seaspan revenue is 1.2B with 98% utilization, 123 ships as of the beginning of the year and 1m TEU capacity so the "average" ship is 8,130 TEU, using Maritime Strategies International Ltd charter rates as of December 2020 8,500 TEU charter for 35,000$ per day so I calculate the "new" revenue : 123(ships) * 365(days) * 0.98 (utilization) * 0.95 (normalizing pricing 8,130/8,500) * 35,000 (day rate for 8,500 TEU) = 1,462,903,575 and I subtract the current revenue of ±1,200,000,000 to get the added income in the short term of 263m to ttm net income of 220m for a grand total of 480m (my number in the previous post included ships that been added since the beginning of the year and already booked ships that are larger and skewed the TEU per ship upward). A better system would be to go ship by ship and estimate its annual revenue but i'm not gonna do that, too wasteful and i'm ok with the margin of error in this estimate (I understand that day rates don't grow linearly with vessel size but even if it's 10% or 20% off i'm ok with it) Seaspans current cost are crew and interest, those are the only costs that can inflate on current ships and interest is going down and not up due to deleveraging that is gonna happen and reduced counter party risk, obviously new ships will be more expensive to purchase either new or second hand but the current new orders produce high single digit unlevered returns with very long charter periods so ROE well be satisfactory and so as you said before should sell above book value (and at a p/e premium for a no growth company since they can reinvest earnings at a rate higher than WACC and produce more than 1 dollar of value per 1 dollar of retained earnings, I value such a no growth company at 10 times earnings even though you can argue in today's market they might be worth more). Regarding inflation : I just don't mind it, if it comes it comes and ruins 95% of my portfolio that would suffer like 95% of the stocks out there. I yet to find a company that isn't somehow negatively effected by inflation and obviously a software company without any need for capital and huge pricing power would be better but where can I find one at such a p/e ? ::) But you are absolutely right about matching duration and I fully expect them to start matching as financing cost drop for them when lenders recognize the higher level of profits, reduced counter party risk and reduced asset price volatility allow them to issue longer duration debt at a much more rational rates. I was talking about spot shipping rates that liners charge importers/exporters, maersk already renewed 40% of their "long term contracts" (1.5 to 3 years) at around 50% higher rates than expiring rates so I don't see how spot market rates go down to previous levels any time soon (although they will go down from current level)

I believe we won't go back to speculative ordering of ships without having a route that can support them for a long enough time, 90% of the market is 3 alliances that suffered major losses in the last decade and need to finally reward shareholders, I see it as a similar situation to the newmarket / lubrizol situation in the GFC (that funnily enough involved David Sokol as well ::)) fragmented industry without any discipline --> everyone ordering ships trying to win market share --> over supply of ships --> major losses --> consolidation & formation of alliances --> oligopoly --> low level of ship ordering --> exogenous shock when companies are vulnerable --> protectionist actions taken to protect the company --> very attractive market prices for the limited amount of companies that left --> increase in supply would increase market share but decrease profits ending in a Mexican standoff that no company wants to ruin the new normal. Now to be fare lubrizol / newmarket situation was a bit different since the product is highly specialized with very high value added and very high barriers for entry and shipping is basically a free entrance with zero moats so I don't expect the situation to be really permanent but a new normal for at least a few years, that's why I prefer the non operating owners rather than the liners, the liners are stuck in this business and have to reinvest and keep going even if the market is bad but ATCO can just not play in a market that is not attractive and walk away to invest in other stuff. just to illustrate how much earning power we are talking about if this market is sustained at current charter rates ATCO will earn 650m for common shareholders if all charters are released at current prices, this will take a few years to happen but when you buy it at 10 times earnings or so you basically gonna enjoy a 20%-30% annual earnings growth without any capital reinvested in the business (so if you assume you can sell your shares at the same 10 times valuation at 4 years you get a 30-40% return for that period and much more if valuation expends), i'm not even talking about other small things that they can do to increase even more net income like retire those yikes preferred shares that pay 8% and cost us 50m a year. My understanding is that 2021 is a done deal in terms of liner rates for shipments, they will be at or close to current levels (at current blended spot/contracted rates of ±2500$ and NOT at current spot rates that would go down from ±4000$ to around 2500$ imo), with 2 years of lag time between ordering and hitting the water and orderbook at only 10% (remember that natural attrition would justify a 4% orderbook if vessels are to be retired at 25 years and since the average age of a ship today is 13 years old and those orders will hit the water when the average age of the current fleet is 15 years old that 6% excess is really not an oversupply but a replacement of ships that are too old) its hard for me to see how charter rates go down in the near term. The reason I think ATCO is a game changer is because new investments in ships won't be nearly as profitable as ships bought in the last few years, prices have caught up and historically companies would blindly reinvest and buy more ships even when it didn't make sense, I expect ATCO to be different and get out of the sector when it doesn't make sense and enter when it does. Within a very short time liners will have very little debt and wouldn't need to charter unless the person willing to lease to them is just too dumb and would offer a rate that is better than their cost of capital (that would be very low in a year or two) so smart chartering is to exit the market when cost of capital is low for liners and enter when it is high. Gonna puke more of my thoughts tomorrow when its not so late in the night for me. ;)

I went BIGGGG into ATCO (and DAC that is much cheaper but more risky imo), like the cool kids say "YOLO" 8)

8% unlevered return doesn't mean 20% ROE, you are forgetting the cost of debt so if they are 1.5x levered (1.5 dollar of debt per 1 dollar of equity) and the cost of debt is lets say 5% ROE will be : (1 * 8%) + ((8%-5%) * 1.5) = 12.5% Regarding ability to forecast its not an easy answer that I can give since there are lots of things that go into it but one thing I can say is think about DCF and the nature of the asset, even if it has a useful life span of 25 years more than 50% of the cash flows will come in the first 12.5 years and the PV of distanced cash flows don't affect the NPV of an investment as much as you would think (for example a ship with a useful life of 25 years that is chartered for 12.5 years at 100$ a year and then is rechartered at 80$ a year for the next 12.5 years will have about 8% ROI if bought at 1000$, lets now assume that after the first charter the market is really rough and you can only recharter it for 40$ a year, than under those circumstances if bought at the same 1000$ price tag ROI will be 6.2%) They actually didn't say a specific ROI they are achieving and obviously they can't know it as long as the investment is ongoing but they said a range of high single digit.

It is very possible to have instant (in human time scale, in computer time scale obviously it won't be 'instant' but would take a few microseconds) settlement even today, the reason it is not like that is netting, netting is the concept that you don't have to change the ledger every time a trade is done and if in the mean time offsetting transactions occur you don't need to register them at all, netting is done to lower the cost of trading since millions of transactions can be netted and there would be only one lump some of money transferred between the brokers instead of millions of cash payments for really small sums.

This sounds like bonuses with extra steps 8) What can go wrong adding bonuses when the business is suffering and signaling employs the leverage is in their hands for the next salary negotiations ::)