Dry Bulk Shipping

If there is one industry group that I like more than any other, it would be dry bulk shipping. Frankly, I don't know very much about the shipping industry, but I have read a lot about it and a number of intelligent investors have mentioned it as a great place to invest. The first, an investor I have the utmost respect for, is Robert Kiyosaki. He has mentioned more than a few times in his monthly Yahoo articles that dry bulk shipping is a place he has put a lot of his own money. The most recent was in January (go to http://finance.yahoo.com/expert/article/richricher/62341 to read the article). An excellent discussion of the merits of this industry are in a Street.com article by Simon Constable. Check out this article at http://www.thestreet.com/story/10418095/1/three-reasons-to-bet-on-the-shipping-sector.html?puc=quotelh .

I have been following this sector since the fall. Jim Cramer told his viewers to stay away from the sector after he was unimpressed during an interview with the CEO of Diana Shipping at the end of October. He was right in the short term, as the Baltic Dry Index fell and a lot of these stocks sold off from November through January. But, they have since rebounded and anyone who got in at, or close to the bottom, would have a nice profit on their hands. I, personally, have had a nice run with Diana Shipping, which I bought in the mid-20s. Last week saw a violent pullback in the sector after another huge run.

I don't think you can listen to Cramer on this one. His timing has been way off--I guess he's recommending them again now, but he missed the big move. Not to say that there isn't more upside, and if Kiyosaki is putting millions of dollars into the sector, I would have to at least pay attention to that. I don't know which way the sector will go from here, but with low P/E ratios, high dividends, a weak dollar, and the slow rate of shipbuilding that's going on (again, read that Simon Constable article), I wouldn't bet against it.