In Hindsight (1)

VLCC orderbook and rates during 2007-09

Hindsight can be deceptive, for investors. It’s as is there was a glitch in our mental software. As soon as something unfolds, it seems obvious… but only in retrospect.

Why do I bring this up? Because I have been reading through various shipping archival documents. Sometimes it seems as if the market is destined to crash, and in fact: the best years were just ahead. Other times it seems like things could only get better… just before the market crashes.

As you know by now, I believe that there is plenty of “juice” left in several trades (like long oil tankers), but that doesn’t stop me from questioning my assumptions. This can be psychologically uncomfortable, but ultimately I sleep better at night.

Today I want to start a new series which I think you’ll enjoy: Sharing commentary from past cycles, and examining what happened just before and just afterwards.

Examining the past is a great antidote to the hubris which accompanies bull markets.

Here is a striking passage from Spring 2007: