A Buy-Low, Sell-High Investment Methodology: The Case of Bulk Shipping

Henry S. Marcus, Maurice A. Glucksman, Babis O. Ziogas and Karl L. Meyer
Additional contact information
Henry S. Marcus: Department of Ocean Engineering, Massachusetts Institute of Technology, Room 5-207, Cambridge, Massachusetts 02139
Maurice A. Glucksman: Pugh-Roberts Associates, Inc., 3 Worcester Street, Oxford, OX12BX, England
Babis O. Ziogas: Bulk Ocean Services (USA) Corporation, 675 Third Avenue, 19th Floor, New York, New York 10017
Karl L. Meyer: Universal American Ventures Corporation, 60 Arch Street, Greenwich, Connecticut 06830

Interfaces, 1991, vol. 21, issue 2, 8-21

Abstract: Investment success in a cyclical market, such as the international bulk shipping market, can be dramatically enhanced by a cost-based buy-low, sell-high investment strategy. We developed an estimator of relative price level for a general asset using net present value techniques and publicly available information on costs and revenues. The estimator compares market price with a cost-based nominal price and thus identifies relative highs and lows in a market. As a test, we used the estimator on historical data to simulate how investment decisions could have been made in the bulk shipping market. Investment strategies using the estimator to time acquisitions and sales perform significantly better than a “blind” investment strategy (where ships are acquired and sold at fixed time intervals).

Keywords: industries: transportation equipment; finance: investment (search for similar items in EconPapers)
Date: 1991
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://dx.doi.org/10.1287/inte.21.2.8 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:inm:orinte:v:21:y:1991:i:2:p:8-21

Access Statistics for this article

More articles in Interfaces from INFORMS Contact information at EDIRC.
Bibliographic data for series maintained by Chris Asher ().