The Owner's Memo #21; Mohnish Pabrai found that Frontline, while the riskiest and most aggressive shipping company, was simply too cheap given an objective reading of the facts. But he didn’t make nea
Recreating the fleet valuation instead of quoting Pabrai's version of it is what sets this series apart: the Clarksons-bucketed estimate landing at $2.30B against $2.32B of carrying value converts a famous anecdote into a checked fact, a step most retellings skip. The exit carries the sharper lesson, because the same supply analysis that justified the entry, scrapping capping tanker supply for years, was also the argument against selling at $9.15, so the gap between 55% and the ten-bagger came from not re-reading his own thesis on the way out. Scoring the exit as carefully as the entry is the rarest habit in this genre.
Great case study Tim. Was happy to run into this as I have fallen by luck into watching and learning about another shipping company over the past 3 years ( Nordic American Tankers limited ), so this was a great layer to add to my very basic knowledge of shipping sector. ( Stock symbol NAT ).
Hi Olaf, great to hear from you here! I’m glad the case study helped. I’m still amazed how much a person can learn by reading publicly available company documents and published books and by speaking with experts.
Recreating the fleet valuation instead of quoting Pabrai's version of it is what sets this series apart: the Clarksons-bucketed estimate landing at $2.30B against $2.32B of carrying value converts a famous anecdote into a checked fact, a step most retellings skip. The exit carries the sharper lesson, because the same supply analysis that justified the entry, scrapping capping tanker supply for years, was also the argument against selling at $9.15, so the gap between 55% and the ten-bagger came from not re-reading his own thesis on the way out. Scoring the exit as carefully as the entry is the rarest habit in this genre.
Thank you for noticing, Owl. It took some digging to track down that Clarksons data.
Great case study Tim. Was happy to run into this as I have fallen by luck into watching and learning about another shipping company over the past 3 years ( Nordic American Tankers limited ), so this was a great layer to add to my very basic knowledge of shipping sector. ( Stock symbol NAT ).
Hi Olaf, great to hear from you here! I’m glad the case study helped. I’m still amazed how much a person can learn by reading publicly available company documents and published books and by speaking with experts.