Broker Check
Houthi Missiles, Hypersonic Investing, Inflation, & Octo-Presies

Houthi Missiles, Hypersonic Investing, Inflation, & Octo-Presies

April 09, 2024

The Rubymar was hit by Houthi rebels on February 18 [Photo © Al Jazeera]

The collapse of the Francis Scott Key Bridge in Baltimore caused by an adrift cargo container ship offers ideas per investing in infrastructure. Please read our Investor Newsletter published March 21st, 2024 - just days prior to this tragic accident: Newsletter: Your Money: Houthi Missiles, Hypersonic Investing, Inflation, & Octo-Presies 

“Remember the names Maersk, COSCO (not the supermarket), Hapag- Lloyd, Yang Ming Marine Transport, ZIM, and Wan Hai Lines. According to Alphaliner online shipping magazine for March 2024, these are the biggest cargo container carrier companies. The costs of goods by ships taking the longer sea route around the Cape of Good Hope are already stoking inflation. And one should consider the peril from pirates to increased port and fuel charges to geopolitical risks.

The deeper and more complex question is whether the Houthis have only accelerated the pace at which all of these shipping giants have pushed to raise prices because longer voyages are going to be the assumption of the future? If this is true, then what we are really seeing is the beginning of economies to scale that will ultimately stabilize or lower the cost of transport and move these shipping companies into profitable positions. In the long view, sinking stock prices now could reward patient investors with higher, future stock prices and ample dividends in a climate where longer sea voyages  by larger and more cost-efficient container ships will offset expenses and increase profits.

How will this be possible? The key is container ships.