I really enjoyed reading The Shipping Man (TSM) by Matthew McCleery. TSM is a novel that combines finance, business, and a great story. There’s something exotic about having your own giant tanker ship. Who doesn’t want a ship that travels to the world most exotic places? And that same ship can make you rich really quickly but can absolutely ruin you. You don’t need to be a professional in finance to read this book. I’m actually recommending it for beginners in finance because you get the chance to see boring financial concepts to work. There’s also pirates and over the top characters just in case you need more convincing. I have attached the first chapter, courtesy of Marine Money International, the company behind the book. ShippingManChapter1 (pdf).
The book follows the story of hedge fund manager Robert Fairchild. With a dull life and an under-performing hedge fund, Robert stumbles into the adventures of ship finance. The ocean shipping industry is a rock and roll one where I don’t think too many people sleeps at night. It’s definitely not for your conservative investor.
This book takes you in the seat of numerous people. The investors, the traders, shipping tycoons, the bankers, the ship inspectors, the Greeks and more.
If you plan on buying the current shipping stocks that have been tanking since the financial crisis, read this book first. You will learn what a TEU is (twenty-foot equivalent), charter rates, DIP (debtor-in-possession), the BDI (Baltic Dry Index), the cost of capital, negative carry-fee, cash-flow leverage and marine economics while being entertained. It seems complex but it’s not when you are enjoying it.
Here a few passages:
“Everyone knows what a ship was worth and everyone thinks they know what a ship will be worth in the future. It is a market comprised of experts, but the experts are not always right. In fact, the experts are often wrong”…”The expert are often wrong because they know too much about a market that is inherently unknowable…”
“Yes, another problem is that everyone has the same information, which means there is no hidden value; there is only the market. If the market goes up, you win. If the market goes down, you lose. And the moment you think there is no risk, that is the same moment you have failed to recognize the risk. At least the market doesn’t lie.”
“You are going to be successful at this business because you are a little crazy and you need to be a little crazy to be a ship owner.”
There’s a sequel that I plan to read, Viking Raid, I will try to keep you posted on that.