Publications

- October 1, 2016; Vol. 3, Number 10

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Red Sea Rising: Mayday

by Mike Consol

1 There are few real assets more majestic than a mammoth cargo ship or oil tanker creasing the waters of the world’s oceans. Their immensity and the sprawling wake fanning out behind them speak of industrial might. Sadly, the maritime industry has run aground this year, and it is time for investors to see the lighthouse warning them away from this rocky shore. As early as a year ago there was every reason to consider a position in maritime as a stalwart member of a real assets portfolio. There was much positive to consider here. When the maritime industry is performing normally, ships — like buildings, pipelines and toll roads — offer a reliable and consistent stream of income, and modern vessels are typically very durable, logging 25 to 30 years of service before being decommissioned. What’s more, shipping is an economic workhorse par excellence, with the global maritime business responsible for executing 90 percent of world trade. Indeed,

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