URSABLOG: The Probable Use Of Language

One of the reasons I started writing this blog many years ago was that I had become frustrated that the market – and other – reports produced by many shipbrokers and other media in the shipping markets were generic and also, well, mind-numbingly boring. The shipbroking houses that had research departments had dedicated writers that could churn out fairly good stuff to order, but many were produced by the shipbrokers themselves, usually on a Friday lunchtime when they wanted to go down the pub with their colleagues, or when their colleagues were down the pub already. As such it was a chore, and usually just tossed off – literally – in a few minutes so they could go and get that welcoming pint to start the weekend, or continue what they had started the evening before.

URSABLOG started as a reaction to the tediousness of reading through twaddle that was both uninformative and lacking in substance, but also a reaction against an arrogance that every word they said would be taken very, very seriously by any shipowner that had the misfortune to read it. Junior (and not so junior) brokers writing up weekly market reports lived in fear of being accused of ruining a colleague’s – usually a senior colleague’s - deal by suggesting the market was going the opposite way to which the colleague had been telling their client for the last few weeks. There was lots of ‘on the one hand, and on the other’, ‘arguably’ and ‘seems to suggest’ so that the authors of these reports could absolve themselves with these qualifiers when their colleagues spat out their coffee, pint or Chateau Lafite (depending on when and where they read the report and how senior they were). The results were therefore largely meaningless.

So URSABLOG was meant to be an antidote to this: I wanted it to be opinionated, safe in the knowledge that our clients at least – I cannot comment on other brokers’ clients – were self-confident, sophisticated, intelligent and wise people who could, as per F Scott Fitzgerald’s definition of an artist, hold conflicting ideas in their heads without spontaneously combusting. And as I have said, shipbrokers’ opinions of their utterances and scribbles, and the consequent effects, is a little on the conceited side, to say the least. I was confident – and have been proved right – that people will read stuff, even if they disagree with it, and still speak to the writer, and even do business with them. There was – and in some corners it still remains – an arrogance, particularly from London brokers, that their word was gospel and was hung on to for dear life by their readers, especially those not based in London. Dear reader, I am here to tell you it is not so.

That is not to say that there are not things worth reading coming from shipbroking companies, in London or elsewhere. The consistency of comment from my former employers, Hartland Shipping Services, is of high quality, and in fact was an inspiration to me. There are others too that I look forward to reading, and enjoy them thoroughly. But others seem stuck to the same old model, and l enjoy them too – although perhaps not for the reasons they intended – as I snort derisively. I am particularly fond of their predictions, fleet growth for example, expressed in numbers up to two decimal places for something expected in two years’ time.

One theme that has recurred on a number of occasions in this blog is indeed that of predictions, or perhaps more accurately forecasting. It is difficult, because in trying to know the unknown, in fact by even trying to forecast the possible, we necessarily stray into the future and are immediately faced with the fact that it hasn’t happened yet.

A few years ago, after reading the very enjoyable Superforecasting , I tried to act on one of the recommendations of the book, which was to measure my forecasts against what had actually come to pass. I made predictions of what the monthly values of certain sizes and ages of secondhand bulk carriers would be in three months, six months, one year and two years time, and then see how close I was to them when the time arrived. It was an important and humbling ?lesson for me. My forecasts were most of the time, as you may imagine, wrong. My conclusions, apart from the obvious one that I could not see into the future, were more profound and unsettling. I was, understandably perhaps, more focused on the present, and what was going on then, than thinking meaningfully on what could happen in the future. Even when I did start thinking about the future, my horizon was limited by a lack of imagination. I could not imagine the future because I was thinking in how things would continue from that point in time, and even two years was too far out. My forecasts were based on the newbuilding order book, likely economic growth (as predicted by others to the usual two decimal points), and what I felt might possibly happen macroeconomically and geopolitically. A confusing mix of fallible numbers and uncertain language – what does “might possibly” really mean anyway – meant that I was, of course, doomed to failure.

This is not all my fault. Most financial analysis of companies, by outsiders or the companies themselves, is done by very smart people, from the best business schools, using the tried and tested methods taught to them, looking at the numbers usually reported by accountants and consequently by companies to the stock exchanges where appropriate. These numbers, then compared with share prices, cash flow, multiples of earnings, profits and losses, EBITDA and the rest are the usual evidence, or at least convincing arguments, used in picking stocks or organising corporate strategy. This is ok, I guess, as far as it goes, but it does not address the possible worlds (a phrase I have borrowed from Philip Bobbit , who in turn was influenced by Shell and their possible scenarios methodology that they use in their strategic planning) that may exist in the future, and what decisions they would likely make when faced with them.

This takes us out of the safe world of numbers and into the rather foggy one of stories and narratives. Of course, no one could have forecast that Covid would have been unleashed on the world in early 2020, but many – most famously Bill Gates – had suggested that this was a risk that was worth considering and should be planned for even though the form and timing was unknown.

But in entering the world of stories, narratives and imagination we have to be wary of the words that we use. A colleague in our research department passed me a paper written for the CIA ?by Sherman Kent (and only declassified in May 2012) called, rather dully, Words of Estimative Probability. The main thrust of the paper was that the words used by the CIA, and in particular the National Intelligence Estimate, the body tasked with writing intelligence reports for the National Security Council and others, meant different things to different people: not only did the compilers mean the same thing when they said that a particular scenario ‘should be considered a serious possibility’, their readers didn’t agree how possible the serious possibility they were considering meant either. Probable? Probably not? Almost certain? With such ambiguity in meaning and interpretation, the paper argued for a more rigid use of words and phrases that signalled probability in numbers. For example ‘probably’ should be understood to mean around 75% likely to happen, ‘almost certain’ at 93% (give or take a few percentage points), and ‘almost certainly not’ at 7%.

This approach came up against some serious opposition within the CIA from the more literary minded and word pedants who argued that language cannot be shackled to numbers, or odds, and that ambiguity of meaning was needed to express the uncertainty of forecast.

The problem with this is that, as I know full well, is that once you have written something – however long and hard you have laboured over the exact meaning of what you want to get across – once the piece of writing has been released into the wild readers are free to interpret it as they wish, and so they do, often with wildly differing interpretations. There is little point in adding a glossary of words and the author’s intended meaning at the end of the article, to nail home the point: few would read it, and in any case it would probably diminish the flow and power of the writing in question, rendering it next to useless.?

However in the interests of clarity and transparency here are a few things I think are going to happen in the coming six months, using the basic table suggested by Mr Kent in his article:

?Certainty (100%):

-?????????? the sun will keep rising every day (if it doesn’t then no-one will be around to hold me to account)

?

Almost certain (93% give or take about 6%):

-?????????? China will keep importing seaborne iron ore in varying amounts (there’s already enough cargo that has been bought and needs to be transported for me to be confident about this)

-?????????? ?

Probable (75% give or take about 12%):

-?????????? The US Federal reserve will reduce interest rates by at least 0.5% (I have the market to back me up, and blame if it doesn’t come to pass)

?

Chances about even (50% give or take about 10%):

-?????????? Kamala Harris will be elected President of the United States (this time it’s the opinion polls that I can count on as a back up, and I have enough margin of error to be wrong as well as right)

?

Probably not (30% give or take about 10%):

-?????????? Liverpool will win the English Premier League (especially after yesterday’s performance, even if past performance is no guide to future performance)

?

Almost certainly not (7% give of take about 5%):

-?????????? Xi Jinping will be toppled and replaced by a General Secretary with a reforming agenda (I mean it could, but it won’t)

?

Impossibility (0%):

-?????????? I will become President of the United Kingdom.

?

Nonetheless, however all these may turn out (and feel free to write back if any my predictions turn out to be wrong), there are different ways about thinking about how we plan for the future, in shipping and in life, ways that could be more productive than focusing just on past performance, numbers and spreadsheets. I am very intrigued about imagining possible scenarios rather than relying solely on strategic planning, and will be writing more on this in the future. Probably.

Simon Ward

www.ursashipbrokers.gr