25
Mar
11

Derivatives on Shipping Containers…Why?

For years we have been suggesting that you invest in shipping containers instead of derivatives. The reason is that the containers do work, while derivatives are essentially bets on performance. Even if you know an investment will do well, you can lose on a derivative if it doesn’t do better than an agreed result at an arbitrary point in time.

The choice remains yours. Invest in a sure winner, or gamble on a game that is hard to understand. Now you can have both, or can you? We are talking about derivatives called container swaps and carrier contracts. We won’t try to spell out how those investments work. We have touched on derivatives before, but suffice it to say that it is like two men in the grandstands at a football match, wagering on the uniform number of the next player to touch the ball.

Click here to see if you can follow the investment. It does display the complexities of derivatives. On one hand there is the certain, even insured success we offer. On the other, a wager about the exact number, price, duration, or some other aspect of what that certain success will be.

We have been asked about our opinion of derivatives on our business. We have no more interest in who is gambling on us than the football team cared about which of the two old men at the soccer match won their bet. We certainly see no reason to participate in that wager.

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Gain unearned income. Own shipping containers and lease them to us. We contract with companies who need to ship materials.

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