Industry Note No. 19 - Not All Contangos Are Created Equal
After the collapse of the global financial system in 2008, crude oil forward curves moved into steep contango. Fortunes were made in storage asset plays in 2009-2010, which is likely the reason that so much attention is being devoted to the topic today; however, the contango is inherently different today than it was after The Great Recession.
Industry Note No. 18 - Take Caution
Although the Ebola epidemic has remained predominantly in West Africa, fears about the virus have spread globally and it is becoming a cause for concern in the transportation industry. From air to sea, companies are beginning to take precautionary measures including suspending flights to various airports in West Africa and refusing to call at specific West African ports. In response to the outbreak, several countries like Brazil and Argentina, have issued guidelines for owners to abide by when calling at their ports, while some countries have suspended activity all together. Port authorities in West and Central Africa are also taking measures at ports in the affected countries. Click the PDF button above to read the full article
Industry Note No. 17 - Regression Discretion: Part 1 of 2
Regression analysis is a helpful tool which may be used to predict a continuous dependent variable (ex: asset values) from one or more independent variables. In our analysis, we use regression models as one component in our asset forecasting process in addition to an income based valuation and input from our sale and purchase desk. When conducting regression analysis, the objective is to identify a strong correlation between a dependent and independent variable using historical data. Using a scale of 0.0 – 1.0, a strong, positive correlation is typically defined as being above 0.7. If the analysis indicates a strong correlation, the corresponding regression equation may be used to help predict the value of the dependent variable; however, it may be prudent to amalgamate regression analysis with one or more forecasting processes to determine a final outcome.
