Archive for the 'History' Category

25
May
11

Will the Latest Middle East Upheaval Disrupt the Asian Economy?

As the Middle East continues its upheaval, The world’s eyes are now focused on Israel and its relationships with The Palestinians and others in that region. Those of us in East Asia can’t help but wonder what impact it will have on us. With the exception of some inevitable growing pains that accompany a strong economy, the Pacific Rim is enjoying prosperity. We would hate to have the rest of the world’s disruptions inhibit our growth.

It would seem that unless Iranian and Israeli relations devolve into outright war, it is no more likely to have an impact on Pacific prosperity than did events in Egypt and Libya. And the Egyptian situation included a trade route as important as the Suez canal.

The Pacific region has been blessed with prosperity because the economies that make up the area were determined to do so. Less than five years ago, most of the world was plunged into a recession. We brought ourselves out of it, despite the fact that classic economic powers like the U.S. and Europe continue to lag behind.

We have withstood one of the world’s worst natural disasters happening in Japan, one of our most important but vulnerable economies. We have withstood the falling like dominoes of Arab countries in the region. It will take more than this latest controversy to slow down this powerful region.

24
Apr
11

Even With Stocks, Peter Lynch Looked for Simplicity

Peter Lynch

Peter Lynch is known as one of the greatest stock market investors ever. But his philosophy was a simple one. He would look to the marketplace for great products or great executions, and buy those stocks. He didn’t wring his hands and study P/E ratios and look for mathematic anomalies. He is known to have said: “Everyone has the brainpower to follow the stock market. If you made it through fifth-grade math, you can do it.”

Just as Warren Buffett invests in what is simple, so did Peter Lynch. He felt that individuals had an advantage over fund managers when investing, because in their daily lives, they would come across companies that were bound for success well before Wall Street would ever hear about them. We think of ourselves as one of those smart investments.

18
Mar
11

Revisit a Simple Time in Investing

Not Exactly Maersk potential, but it was state-of-the-art in its day

We often simplify our lives in order to eliminate inefficiencies and clutter. Many of us fast for periods to cleanse ourselves physically. We meditate or pray to do so mentally, or we may attend a retreat to a place where daily comforts are set aside in favor of a more simple existence.

It would be wise to do the same with our investment portfolio from time to time. Trading stocks, bonds and derivatives has become an incredibly complex process. Computerization has made executing the process convenient, but the formulas, calculations, and middle-men required are part of a process that is anything but simple.

However, if we look back at the start of stock exchanges in the 1600’s we find a simple process. An expedition would take off from Europe to the East Indies in search for spices. To fund the expedition, investors would contribute to fund the trip, and share in the profits upon its completion. Simple: The trip costs X, the trip earned Y. Subtract X from Y and split what remains among the investors.

We find it ironic that our simple shipping investment is structured the same as the original shipping investments, but it makes perfect sense. We understand it and our investors understand it. We think it should always be that simple. Perhaps in our industry it always has been.

28
Feb
11

Rising Cost of Energy

 

To the world's economy, and the people of Libya, stability is worth the uprising.

Rising energy costs impact all of us. Everything you buy has the need for transportation. Even the iphone application you downloaded required a programmer to get to work in the morning, and that took transportation of some kind.

Those rising costs mean a rise in prices for everything. In turn, that means demand for everything goes down. There is no more money available in the economy, yet the price of everything is rising. Necessarily, less is purchased.

We are in the transportation business. We have seen these costs rise before, and know the impact it has. It is that same experience that tells us not to panic. For one thing, these price spikes typically subside once a problematic event is resolved. Middle East uprisings, especially in Libya are chiefly responsible for the recent price increases. As dramatic as those events are, they will be short-lived, even if they go on for several months. When you compare the effects of these brief events with the long term-view that economies employ, you will see that in the long run, these events are mere interruptions.

In the mean time, materials still have to move. Those materials move most efficiently via cargo ships. What may have been sent via air, rail or truck before is more likely to go via ocean cargo if that is an option. Many will sacrifice speed in favor of costs. No matter the price to ship, ocean freight still moves most efficiently. We are all anxious for those costs to come down, and for our friends in trucking, rail and air to become more competitive again. They fill a different need than we do.

05
Feb
11

Our Hopes are With the People of Egypt

Working hard for a relatively peaceful Egyptian revolution

The Egyptian situation saddens all of us greatly. No one wants to see this great civilization fall into the kind of disarray that it has over the last couple of weeks. It also affects all of our lives as well. Besides our mutual humanity, the Suez Canal is a major shipping lane connecting Asia with Mediterranean ports.

Their difficulty has caused world oil prices to rise, and hinders trade throughout the world. For years, we have suggested that you own our shipping containers as a strong investment in good times, as well as a hedge against difficult times. The Egyptian situation stands as a good example of why our investment is a good hedge against difficulty.

Closing the Suez Canal will cause shipments to Europe to move slowly and less efficiently over land, or to require a long route around Africa. This will cause prices to rise, and demand to fall. It will hurt the number of leases we can write as a result. However, it will also increase the length of time on our new leases. Those alternate routes will put our containers on routes that take considerably longer than they would otherwise. The result is that the strife is likely to have no adverse effect on our business. If we could have a choice, we still wish the Egyptian situation wasn’t so. We prefer a world that works for everyone.

There are lessons for us all in the Egyptian situation. We would be wise to learn all we can from it. Including how to invest. As we watch, we hope it ends in unity and a return to prosperity for the Egyptian people.

22
Jan
11

President Hu Jintao Visits The United States

This week, Chinese President Hu Jintao visited several American cities. The two super powers have had a cool relationship, and this visit signals a significant warming of that relationship. If only for the mathematics of it, their improved relationship helps us all.

A couple of charts accompany this blog entry. They show the relative size the U.S. and Chinese economies. Clearly, they dominate the world’s economies. In fact, if the U.S. were a mere 1% larger, it would be as if we added a whole new economy the size of Singapore to the international marketplace.

Over the last few years, many of the largest economies on the chart have been stagnant in their growth. Even as Asian economies have enjoyed substantial growth, the lethargy of those large economies has held the world back from where it could be today.

We applaud both China and The United States for taking this step. We are anxious for the day we can report that all of the world’s economies are growing comfortably. We  hope that some day we will look upon the January 2011 visit of President Hu Jintao to America as the day the world’s economy started to grow again.

01
Nov
10

Less Is More

 

Simple design works.

The famous architect, Ludwig Mies van der Rohe had a saying:  Less is more. It was a statement on behalf of his minimalist design.

 

That sentiment can be true in so many areas of life. It is true in art, architecture, education, poetry….even investment.

Investments today tend to be complicated formulas only understood by those who deal with them daily, and the computers that create and calculate them. When you combine that with the fact that traditional investments are simply not providing returns that satisfy investors right now, you have an investment conundrum.

Pacific Tycoon’s investment concept is truly simple. Basic common sense and business sense make it easy. You need not understand the market and how it reacts to expectations vs. realities.

You don’t need a company’s balance sheet and prospectus to identify whether or not it is a good opportunity.

You know that shipping containers are needed to ship goods over distances. You know that more shipping containers are needed when the economy is strong. You understand that owning shipping containers means revenue when you lease out that container. We offer a simple path by which you can own containers then rent them out to companies who need them. A simple investment.

Buy containers through Pacific Tycoon. We will make the purchase on your behalf then place the container in our inventory where is will be available for lease. Our inventory is not a physical location. All of our containers are in use. We have more demand than containers, so your container is immediately sent to a destination to start making money. We don’t own them ourselves, because we are best at logistics, and need more than we can buy on our own. We depend on container owners to provide us with the supply our clients demand.

So you own the containers, you profit from their being leased, and you can sell them whenever you want. We’ll handle all the transactions for you.

It is simple, understandable and profitable, just the way it should be.




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

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