URSABLOG: A Feel For The Markets

In thinking about, or remembering, market movements in our lifetimes, or before, the picture becomes distorted very quickly, even if, perhaps especially if, we have lived through them. This is true of any market, and in fact of any event and depends, I suppose, on proximity to and the effect it has on us personally. For example the most traumatic event in the last twenty years for many in the dry bulk market was not the Lehmann Brothers induced crisis of 2008 and that which followed, but was the long slow downward grind of the depressed freight market between the middle of 2014 and the signs of recovery in late 2016 to 2017. I know of more owners who suffered and some who went out of business in that latter period than the former. But that is because the unique and targeted effect of over-supply which caused that particular market was felt mostly by dry bulk carrier owners – and their brokers, bankers and so on – alone. The rest of the world lived on in blissful ignorance. In 2008, everyone was living through it, and so it stays in the collective mind.

Memory is of course fickle and unsteady. What I remember at certain times is surely affected by what I was also living through at the time, whether or not the two are connected. A time of supreme market panic can seem supremely calm and joyful if we are having personal success, or even if it is one of those moments when good things are happening, like falling in love, or having a child. Likewise the death of a parent or the illness of a loved one can overshadow and poison the type of stellar personal success we have always dreamed of. Our minds, consciously or unconsciously, associate the time with the feeling, and when we are troubled or believe we are not succeeding, we look back to what we were feeling when we were successful, or felt happy, and try to recreate those conditions. This dissonance at best can be confusing, at worst destructive.

Making sense of and improving the present is the default setting of the human brain, without rationally comprehending the patterns of causes that have led us there. In fact we can never fully comprehend anything from our position in the world, so we do the next best thing we can: create our story, our version, our narrative. Without this unique capability of the human mind we would go mad; sometimes despite, or because of it, we do.

By madness I not only mean the deterioration of our mental health, in some cases where we end up harming ourselves and others around us, but also the collective madness that can grip markets during steep rises and falls, particularly at the peaks and the troughs. Normally sane and conservative people take outrageous risks, or do patently stupid and misguided things, some of which come off, some of which cause catastrophe and disaster. Reflecting on these events afterwards it is indeed rare to find people who do not blame events or blame other people to sooth their nerves and find the reasons why they did they did. The people, and companies, that can look at their actions and see that the root of their actions was inherent in the very make up of themselves, or the company, and take correcting actions, can move on quickly. The rest of us remain stuck, blaming people, countries, politicians, history even, or by comparing themselves favourably, in character and background, to those that didn’t make those same mistakes. And so life goes on.

We are in one of those periods of history, especially on the world scale, where things feel very frightening and out of control, from the invasion of Ukraine to Xi Jinping reminding the world that the Chinese people, and they alone, will decide the fate of Taiwan. In both particular cases, there is a sense of powerful people seeking to right personal grievances that they have suffered, and assume that their people share them. Whether they do or they don’t is another matter. Many of those that criticise them now had chosen to ignore the signs that were surely there in the build up to these crises, mostly because it didn’t affect them – it was peaceful and unthreatening – and in some cases that they actually profited by them.

There has been much debate within the shipping community about the morality and ethics of dealing with Russia, and to a much lesser extent China, beyond avoiding any business that is actually covered by sanctions. Most of this debate has been carried out privately and away from the media. What business to do and who with is a constant challenge for most in the sharper end of the shipping market, and I guess by this I mean the tramp market ecosystem. For most of us it is not a simple moral choice who we do business with, except perhaps those with the means to do so. Doing business with and working only for the people we want to work with is for many an unaffordable luxury. Even if we are blessed and able to work in this way, sometimes we are disappointed when the image we have of that person or company is tarnished by reality as we get to know them better.

I have come to the conclusion – and you are free to accuse me moral laxity or cynicism – that in the end those choices are mostly out of our hands. We cannot dictate to people what they should be because even if we try to do so, these people, these companies, these governments will stubbornly persist in being who they are, even if they genuinely believe you are right and want to change.

In a phrase that has stuck in my mind – which a friend working for a dry cargo ship owning company said to me – we, the shipping community, cannot be the moral arbiters of world trade. We can only make our own choices and act accordingly, doing our best for ourselves and those around us, whatever that means to us. We have more than enough to be thinking about without evangelising on moral philosophy. If we think we are right, and we are lucky, maybe only by example can we change others’ point of view. Whether they change their behaviour is another matter entirely.

What we think changes, as the markets change, as our lives change, and we all go through the ups and down, the hope and the loss, the joy and the pain, that what being a human being is all about. And those changes are caused, most of the time at least, by factors completely out of our control. What we feel about them, how we deal with them, what our actions are and what happens thereafter is not a one-off event that we can look back on and say “Yes, at that point I did this, and that led to that”, however much we would like to create and remember such moments; I say this with some sadness. But it is the actions that we do day to day without even thinking about them at the time, let alone remembering them, that accumulate into what we are and what we do.

So it is therefore no surprise perhaps that it is those momentous events – the Lehmann Brothers collapse, 9/11, the birth of a child, the loss of a loved one – that stick in our minds as the cumulative event, as the decisive point, after which everything changes. It is, of course, not the case. The seeds of any event – even the delivery of a ship – have been planted long ago, and are affected by many things before that event can fully blossom. But blossom it will.

One of the blessings of working in the shipping market, and one of the curses, is that apart from what we can try and control, or at least influence – ourselves, our working environment, our business practices, our decisions, the relationships that we have with others – we are at the mercy of the market. A curse, because we want to be able control the future, a blessing because we can’t, and so life does not become dull and predictable but challenges us. How we react to those challenges defines who we are, and – we don’t like to think it matters, but it does – how other people see us.

Whether I get a terrible sense of foreboding when reading the latest news, or watching things fall apart around the world as positions and people change is besides the point. It is what I am feeling, and however important that is to me it also stops me thinking about what other people are feeling, which is even more important. I feel that the shipping community is in a nervous and fearful state at present. That the shipping community is nervous and fearful reflects that the world we live in is in a similar state too. What I can actually do to change this is very limited, it does not mean that I should stop trying to do it. It’s part of my human condition, and it’s how I feel.

Simon Ward

www.ursashipbrokers.gr