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Think For Yourself.
In my unlinked "Investor" account, $ZIM recently became my largest holding, overtaking a DCAing QQQM. Since 2021, I have enjoyed holding ZIM through the volatility (CC's & CSP's) and collecting the generous dividends ($22.35/sh to date; 45.8% yield).

Watching ZIM the past few weeks has been... less fun.
The past month, ZIM is down -20.9% ($SPY = -6.1%). Ouch.

I even thought about selling my remaining shares for a small loss.
...decided to go for a walk instead and think about things.

WHAT HAPPENED??
In the chart below, I have annotated major price action events with possible explanations. I believe a lot of the movement is related to the $17/sh dividend paid in April. It is important to note that I use the term "snatchers" in the most endearing way possible.

The other important timeframe noted on the chart is the historically busy shipping season (June - Oct) prior to the United States holidays. In 2021, a significant share price increase occurred during this time. I expect a similar response in 2022; perhaps more muted due to the reasons discussed below, but still upward.

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The event responsible for the most recent price drop is a Freightwaves article released on June 7th: "US import demand is dropping off a cliff".

The article, makes the following points:
  • Imbalanced inventory -> $TGT self-reported inventory issues used as evidence
  • Consumer demand hurt by inflation
  • No evidence (yet) of expected surge of shipments from Shanghai after COVID reopening

On that 3rd point, I thought the data below was interesting as it shows Shanghai booking volumes (red) dip during the lockdown and a corresponding volume increase at Ningbo (yellow; closest alternative port to Shanghai). Instead of waiting in Shanghai and contributing to the "backlog", the shipments were simply re-routed through Ningbo thereby avoiding the surge of shipments upon Shanghai reopening.

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From the same article, the data below shows both decreasing container volumes and spot prices for ocean freight (China to United States).
  • Decreasing volume & decreasing prices (= less $$ for ZIM).

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Before this last point, I need to emphasize again how amazing 2021 was for ZIM (below).

For me, the buried headline in this bearish article is that the "low" 2022 spot rates above are 73% or 59% HIGHER than 2021's rates (YoY; for West or East coast ports, respectively).

This all seems like an over-reaction to me.
Might be the 1st time the market has done that, right?

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Glad I went for that walk.
Still holding ZIM.
Looking forward to the holiday season.
FreightWaves
US import demand is dropping off a cliff
There’s no wave of containers coming to rescue U.S. freight markets. Booking data shows that U.S. imports are cratering.

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