DRY BULK SHIPPING

On October 18Th 2007, Jim Cramer on Mad Money made a call in favor of Dry Bulk shippers. His best pick at that time was Dianna Shipping which is down 11% as of today. The main players in the group are down an average of 35% since that call. I am going to stick my neck out and say that the group has hit a bottom. I'm going to buy DRYS, the fastest growing and cheap on a relative valuation basis and has a chart pattern I like. Its down from 130, tested its lows twice around 71 and it's headed to PAR (first major resistance) in my humble opinion.

Now, I hear all this talk about shipping rates coming down and there is a lot of negative news out there regarding slowing world growth but if you read my past posts I don't think that's true.

I have been to India (IFN, nice yeild as well), Middle East (TRAMX)(Dubai and Abu Dhabi) and Pakistan. All those countries are growing very quickly and the thirst for raw materials will not end any time soon. What we take for granted here are all luxuries in other parts of the undeveloped world (obviously I am not referring to Dubai or Abu Dhabi).

I am talking about food (MON, MOS, TRA), hot water in the winter, electricity 24/7, gasoline for cars and trucks as needed. Roads that aren't cracked up, cell phones, broadband Internet,Cable TV just to name a few. What are reffered to nowadays as emerging markets were all agriculturally based countries for hundreds of years (except Russia, political problems and war set it back 50 years) and Industrialization only began a couple or three decades ago. The rural workers moved to the cities to work in factories. They now can no longer grow their own food, they have to buy it. They need phones, but they have no credit. They buy pre-paid cell phones. They need transportation to get to work, beds to sleep in, electricity, you get the picture. If there is a slow down it will be small and temporary because its going to take forever to develop places like Africa, Russia, China and Eastern Europe (CEE). It'll take 20 years in India just to fix New Deli and Mumbai's infrastructure, 30 plus years in Pakistan but they are both moving in the right direction (aside from terrorism). As for places that are on fire. South Africa (EZA), South Korea (EWY), Brazil (EWZ) and certain parts of Latin America growing and have tremendous resources(they need infrastructure). Some resource stocks I like FCX, RIO, BHP and BVN). I am not naming any machinery stocks like TEX and CAT cause the price of US slowdown is not in the stocks but others like FWLT and MDR are making new highs even in this environment that speaks volumes for my thesis. Also look at all the Ag. stocks they are ripping while the averages are below their 200 day moving averages.

Please note my thesis on world growth is based solely on what I have seen, and experienced with my own eyes. The growth train around the world is rambling and strong its going to keep rolling. The only thing that can stop it is war in the respective regions I mentioned, so pray for peace.

With that said I will continue to believe in the world growth story until my charts tell me different.