Yep. That's the guy. He was on some radio interview or something that someone on another site had posted the link to. The only reason I clicked on it was because the poster said something to the effect of "this is brilliant". I listened for a few minutes... like I said... oil tankers and me have a jaded history. I bought some Greek one for the divy waaaaay back when and the thing tanked. Sank. No pun(s) intended. Tsakos. But reading what he wrote on that link you just provided, it does sound like the guy was ahead of the game on this one. I mean he's obviously no dummy. This: Interest rates are effectively zero today, so you have no finance costs, your only real cost is renting the tanker. Let’s say you put away 2 million barrels (the size of a VLCC) for a year and shorted futures to lock in a $22 million profit (2 million barrels at $11 each). How much of that profit do you think you have to share with the owner of the VLCC? If you guessed it was most of that profit, you’re qualified to work for Vitol. Remember, the guys with the tankers get to shop these against multiple firms who can take a risk-free position and leverage it almost infinitely. Say you give the traders $2 million and keep $20 million—well, that’s an insane profit. The sort of tanker that would be chartered for storage is likely only worth about $25 million and has less than $5 million of equity into it. If you own this tanker, you just locked in a four-times return on your equity in just one year. Pretty nice! Now, traders tend to get closer to the front of the curve. You make $8 for the first 6 months of storage and the 3-month curve is even steeper at $5. Imagine earning $5 per barrel, four times in a year? You make $20 in contango. As you can imagine, trading houses want to lock in the tanker and go right into the teeth of the contango. Let’s not worry ourselves with how much Vitol will make—they’re big boys and can take care of themselves. What matters is what the tanker owner makes. Let’s just say he’s making so much he doesn’t mind locking up his vessel for a very long time. The thing is, we’re going to need hundreds of tankers to store the 2 billion barrels of excess supply. But wait, there’s more!! Think about the oil curve. If oil is in the $20s today, no one is spending cap-ex on drilling. Where do you think production will be in 2023? What about 2025? I bet it’s off by millions of barrels, maybe even tens of millions. Once the margin calls are done, where do you think 2023 oil futures will trade? $50? $75? $100? Have you seen how much stimulus they’re throwing at the global economy each day? It will take some time, but demand will come back with a vengeance. I don’t know where 2023 oil will trade, but I guarantee you it will be VERY steep to the front month. This isn’t a few month contango thing, this is going to last for a while as all that inventory keeps the front of the curve heavy. How long? A 2-billion-barrel surplus getting worked off at a 5 million daily deficit will take 400 days to work off. Meanwhile, the storage cost is going to be astronomical. The front month will be on the floor and deferred months will be into the sky. This will draw in more and more tankers playing every part of the curve with all that free Federal Reserve bailout money. Now, let’s say that the oldest few hundred VLCC tankers go into storage trades. That seriously crimps the global fleet supply of roughly 800 actively transporting crude. When 26 COSCO tankers were sanctioned last fall, rates went to 10-year highs. What happens when a few hundred leave the transport fleet? Well, rates go to Pluto. At current daily charter rates of around $200,000 to transport oil, a VLCC earns $70 million, which is a stunning return on a 10-year vessel worth about $50 million. Even better, the owner likely only has about $20 million of equity invested. This means that at current rates, the owner makes 3.5 times his money each year. Ironically, despite all of this going on, most tanker stocks trade at roughly half of NAV. This means that they’re earning somewhere around 5 to 8 times their market caps in a year. By the way, this isn’t theoretical. There have been almost 100 fixings in the past 10 days and almost all are north of $150,000. There have been dozens of time charters for storage. It’s happening. Even if rates back off to $100,000, tanker companies will earn unfathomable returns.
Jesus Christ. He is still "hustling"... @vanzandt "I mean he's obviously no dummy." I spent time with him, and he is well versed in economics & history. Anyone who is able to raise $100M, then blow it all away, and THEN raise another $50M, and then blow that all away as well, is obviously not a dummy. He is a hustler, plain and simple. Surprised he still has $8M left. I guess he is now going into the subscription model. Anyway, I have done my moral duty by sharing my initial (and last) experience with this character. Hopefully, it's helpful to others. The unfortunate part is that this industry is filled with shady characters. I had NO idea that an anecdote from my past, could exhibit a major investment disaster ($100M lost in "remote" African Mining), which has been fully deleted, and I am not holding my breath for Kupperman to address it. I am very grateful for that "Marquis Jet Card", facing my way, during my meeting with Kupperman, which gave me really bad vibes, and my intuition told me to run away. So no bitterness here (nor any money lost), I am simply sharing my experience, so others can learn from it...
I don't know how long he held the position prior to the blog post or when he exited, but they have gone nowhere. A few are down; one is up 50%.
Yet finished the year nicely positive. So what does that tell us? Also one can be a bad fund manager and still a good trader. As a market commentator, he is/was spot on about crypto, made a multibagger in it. Now he is saying, there is a similar set up in Uranium: https://adventuresincapitalism.com/2021/09/02/the-new-gbtc/
You should most definitely sign up for his service. He has been discussing his Uranium play with his insider crew of subscribers, TWO full weeks before making it public. "Subscribe Now!"... As I PM'd you, my concern is the $150 Million dollars pissed away. The first $100 Million lost with ZERO explanation. But if you can make a killing from his commentary, go ahead!!! I suggest you simply directly invest in his fund. If you believe in him, this is, without a doubt, the BEST way to take advantage of Kuppy's insights. Do it!!! PS. Still fascinated by these hustlers, able to reinvent themselves, over and over again. I mean, he actually got you. Amazing...
Well, Niederhoffer managed to blow up his hedge fund not just ONCE, but TWICE! There were some criticism papers written about his 2nd attempt after the first disaster, and warnings how history with these risk-taker traders always repeat. And it did!
Cool. I have personally met Victor Niederhoffer in NYC, back in 2014. I am fully aware of his performance, and have read his books. The issue is that Victor Niederhoffer was NEVER a hustler. His performance is quite public. He does not have some "hidden" losses (that no one knows about), like Harris "Kuppy" Kupperman's $100 Million dollar loss in obscure African Mining!!! Nice try, though... PS. Still fascinated by these hustlers, able to reinvent themselves, over and over again. I mean, he actually got you too. Amazing...
Well, his tanker thesis didn't work... if your cash was evenly distributed in those names you didn't earn. SPY almost doubled from his March blog post.
THANKS MAN... PS. Even in 2014, Victor Niederhoffer looked depressed as hell. I was concerned, and I had already watched that Japanese documentary when he had his first massive loss. Brutal...