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J Mintzmyer of Value Investor’s Edge discusses shipping in 2025, strategies for navigating market downturns, and the importance of focusing on quality investments (0:45). Dry bulk potential, Cmb.Tech a top pick for 2026, impact of geopolitical factors on shipping (4:30). Stock selection metrics (12:20). Role of dividends in shipping (15:10). Broad macro risks (16:45). Learning lessons, setting goals (22:20).
Transcript
Rena Sherbill: J Mintzmyer of Value Investor’s Edge, shipping sector expert extraordinaire. Welcome back to Investing Experts. Welcome back to the show.
J Mintzmyer: Absolutely, Rena, thank you so much. And of course, we’re recording during the holiday season here. So happy holidays and looking forward to the new year of 2026.
Rena Sherbill: Yes, I think everybody is looking forward to a new year. Why don’t you catch listeners up as we’re heading into 2026? Value Investor’s Edge has been a place on Seeking Alpha that people have been able to come and learn about shipping, get real insights into shipping stocks.
What’s going on at Value Investor’s Edge with this new year? What do you have going on and what are you looking forward to in 2026?
J Mintzmyer: 2025 was a big year for us. We launched the platform in the middle of 2015. So we celebrated our 10-year anniversary as a platform. This past summer, we were able to have a big meetup in New York City alongside the Marine Money Conference. We hosted about 40, 45 members out there for that. So that was a nice celebration of the team.
And of course, it’s grown. It was just myself in 2015. We added to someone in James Catlin in 16, and now we have a full team of 11, just what a year of growth and it hit that 10 year milestone. So that’s been good on the big picture business front in terms of shipping investments. 2025 was a good year for us, but it was not a excellent year. I mean, I think we’ve been spoiled a little bit in the shipping markets where we were putting up returns in 2021.
We did 133% with just long only stocks in 22 and 23, we put up 50% to 55% those years. And so this year, we’re recording on December 30th. So we’re about as close to the end of the year as we can get, possibly, unless we want to work on the holidays. But we’re here at 23% year to date. And that’s long only stocks.
In the shipping markets, it’s a good year. Russell was only up 12%. And I think S&P (SP500) was up 16%. So we beat the market, beat it quite handily. It’s not the 55, it’s not the 133%.
So we’re always striving for bigger and better, but that’s kind of the big rundown there between celebrating the community, just a fantastic community, we have over 700 active members and a research team of 11 celebrating the 10 year anniversary and then putting up another good year in the markets.
Rena Sherbill: What would you say, because you’re not alone in that the returns haven’t been as good as you would have liked, what would you say in terms of navigating downturns in the market, sector downturns, when things you know aren’t going to go as well despite your investing strategy?
What do you keep in mind? And are there particular stocks that you’re more focused on? Are there particular metrics that you’re more focused on? Are there particular stories that you’re more focused on? What do you keep in mind as the downturn happens, as a way to see yourself out of it?
J Mintzmyer: That is the right question. And this year, in 2025, that was a totally pertinent question for us when we got into March and April. Think back to so-called Liberation Day.
And that was when, if you go and look at our models, we were down 15 or 20% year to date at that point. And pretty much anything in the market was down about that amount. So it wasn’t like shipping did any worse, necessarily. But it was a time of testing our convictions.
I think when we get into a period of time where there’s either greater macro risk from tariffs or from economic slowdown or maybe some of the stocks look a little bit more heavily valued, you really got to focus into quality.
And that’s one thing we’re setting up as we set up our 2026 top picks. We will be publishing those to the Value Investor’s Edge platform right on the 31st to get ready for the new year. And as we construct those models, we have a value model and a speculative model.
And we’re really looking at, we always try to look at high quality, but we’re really looking a little bit more defensive, a little bit more higher quality, a little bit bigger backlogs, stronger balance sheets.
We’re taking a little bit more of, I don’t know if defensive is the right word or cautious. These can be loaded words, but I think we’re definitely going a little bit more in that direction as we look at a more uncertain global macro setup.
Rena Sherbill: You’ve been on previously talking about tanker stocks.
I know that you also released an article around Thanksgiving about CMB.TECH (CMBT) as being one of your outperform picks for 2026. What would you say about the different columns within shipping, be it tankers, et cetera?
J Mintzmyer: I think the big exciting flashy sector for the last couple of years has been tankers. And there’s been several reasons for that. You had the Russian invasion of Ukraine, which led to lots of sanctions and rerouting of the ships. And then you had the Houthis disrupting the Red Sea.
And that particularly impacted some of the smaller tankers, the products, they carry gasoline, diesel, jet fuel, that kind of stuff. And that sector was really top of mind for the last couple of years.
Rates were at multi-year highs, asset values were at record highs. More recently, and you alluded to it, you mentioned the CMB.TECH article that we put out. That is our top public pick.
Of course, we have private picks as well. I just finished building the list with my head of research today. We have seven names in our value model and six names in our speculative. So 13 picks there.
CMBT is indeed in the models, of course. It was a public pick, is a private pick as well. And that one is primarily dry bulk. And so the segue there is the dry bulk sector has been kind beaten down for most of the past decade. So the shipping companies have not properly invested in new tonnage and replacement capacity.
At the same time, there’s new mines opening up across the world. The biggest one is a iron ore mine in Guinea. It’s sponsored by China.
And China wants to diversify away from Australia and Brazil into a more friendly corner of the market. so this iron ore mine in Guinea is a national security priority for China. And so we’re going to see them shift a lot of their cargoes in that direction. And for shipping nerds, we always look at the distance on the map. And whenever the imports and exports are very far away, shipping owners are very happy.
And Guinea, you have to pull out a map of Africa and look, it’s Western Africa, is a lot further away from China than Australia. And so every cargo that is displaced that China replaces Australia with Guinea is very bullish for the dry bulk sector, particularly the big ships.
CMBT is the stock symbol, the name of the company is CMB Tech. It’s kind of a silly name in my opinion, but they are 60% dry bulk and they’re about 30% tankers.
So this is a shipping company, not a tech company. They’re just getting a little hokey with the company name there but they are extremely well positioned to benefit from nocturnal dry bulk and not only that we got the 30% in tankers that is riding a very very strong tanker market.
We are at multi-year highs in current rates for both VLCCs, the largest tankers and Suezmaxes, the medium sized. So tankers were hot the last couple years. They’re still hot right now, we believe ’26, ’27, dry bulk is the place to be.
And that public article, I’m sure it’ll be linked in our interview or in the transcript, but that’s available on Seeking Alpha. It’s a public article, public pick for ’26. Totally stand by that. It is indeed going to be in our top models for 2026, but keep in mind, we will have 13 total picks in those top models.
Rena Sherbill: One of the things that you mentioned in that article was that the headwinds that were coming for the shipping sector are shifting into tailwinds, particularly around the tariff conversation and the international picture.
What else would you add to that geopolitical international conversation about why the headwinds are becoming tailwinds?
J Mintzmyer: Yeah, I think it’s all sort of related, but earlier this year, as I mentioned, we had the liberation day and sort of the panic involved in that.
And at the time, it didn’t even seem like panic. It just seemed like a rational market reaction to increasing tariffs and global confrontation. As I mentioned, and you mentioned in your question, we believe those headwinds are shifting to tailwinds as the US and China are negotiating more and more and we’re seeing more agreements and backing off. There was a lot of talk of port fees for ships. Those got canceled or at least delayed.
There’s been an endorsement with China for them to buy more strategic minerals, oil and coal and things like that.
And then not only that, we have the upcoming Supreme Court decision right on the tariff. So we’ll see what goes on with that. But regardless of the Supreme Court one way or another, it’s clear that President Trump wants to strike trade deals with these countries, you could say better trade deals than we’ve had. You could frame it in that way.
But we’re not trying to turn off or destroy trade. And I think there are some voices in the administration, some advisors who you could say they’re more hawkish on trade. And I think some of those voices were louder in April and May of this year. And those voices have taken a back seat in the last few months. And so I think that’s the headline.
But I think so much of that is related. So you have global economic growth that is so dependent on growing trade and strong proper negotiations as opposed to just shutting down the ports and doing confrontational things. And so I think we’ll see higher than expected economic growth both in the United States in terms of GDP. We already saw that, right?
The preliminary numbers for GDP came out, I think it was about a week ago. It was kind of highlighted as like an early Christmas gift and it was very strong, over 4% GDP. And so some of that is related to the trade flows coming back.
But those are stronger economic numbers than even I had anticipated. And I think we’ll also see a potential for some stronger numbers out of Asia. Because a lot of folks were saying that Asia could enter a recession based on the US trade confrontation. I don’t think that’s the case.
And so I think we’re going to see stronger macro stuff going on in 2026. I think Drybulk kind of outlined the basic case. It’s also in the free public article. James Catlin did a phenomenal macro article on Drybulk that I recommend everybody should read. But we’re very bullish on that into ’26.
And then finally, sorry, I get long winded on these things, I appreciate your patience. finally, I think we are due for a potential, I call it a thematic rotation. I think the Mag 7 and Big Tech and the AI themes have had such a strong run. And I don’t want to talk negative about that. That’s not my lane or take away from that.
But a lot of classic value stocks and small cap stocks and commodity stocks have been totally left behind. And we’re seeing some of that rotation start to play out in weird different ways.
We’re seeing it in precious metals. We’re seeing a very, very strong run in gold (GLD). The silver (SLV) markets are crazy. I don’t understand them. I’m not the expert, but we’re seeing more push towards commodities, towards minerals and things like that.
And we’re classic value stocks. I think shipping benefits if we do indeed see a thematic rotation. And I think mag seven tech AI, it’s kind of had its day and I think we’re seeing stagnation in that momentum. And if some of that money rotates into these more value oriented, real money, real industry sectors, I think that would be very positive for shipping.
So I mentioned we’re conservative or cautionary in some ways in our model picks, but we’re not cautious or scared or pulling back in shipping. Not at all. In fact, we’re deploying a higher percentage of our cash in the models. We are very optimistic. It’s just the companies we’re picking are higher quality.
Rena Sherbill: There’s definitely a big play for the rotation out of tech and certainly interesting to see what the new year will bring vis-a-vis that.
What would, or is there anything else you would add in terms of particular metrics that you’re using to call these top picks for the new year? And is there anything different when you’re looking at stocks that you’re picking for the new year as opposed to along the way? Like, is there something in particular that you’re keeping in mind for the whole year?
J Mintzmyer: I think the metrics that we use, we cover almost 50 shipping companies on Value Investor’s Edge. And when we pick our models, the picks should not be too surprising to our current members because we start with our fair value estimates, which are basically like price targets.
This is what we believe the companies are worth. And we look at those with the most upside. And then we curate those. We take out some that have maybe sketchier management teams, riskier balance sheets, or maybe we already have two tanker companies, so we exclude the third one.
We look a little bit at diversification, but really all those picks are fundamentally based, and they’re based on where the fleet is positioned, what’s the value of the fleet, what are the spot rates, what are the long-term rates, what are projected earnings and dividends for the upcoming year, all the initial picks and fundamental, it is embedded in fundamental research.
We don’t do a lot of trading, at least not in our models. Some of our members are more active traders. Our chat room is very active with people talking about trades, but that’s not really how we set up our models.
Now, you asked, is there a big difference between the annual portfolio and the monthly updates? Because every month we do a monthly update. We post a letter. We do a short video. We rotate some of our picks. We rebalance. Yes and no.
No, in the sense that there’s a similar type update, nothing’s going to be a total surprise. We’re not going to just totally delete all of our picks from last month and start anew. Most of the, a lot of the picks are going to carry over. So in that sense, it’s not that much different.
However, one of the things we try to do at Value Investor’s Edge is reduce our turnover because we know people look at our models and try to follow those names and we don’t want to be trading in and out of a name every month or two months.
Our normal holding period for our picks is anywhere from about six to 24 months. And so we’ve had a couple picks in our models that we picked as top ideas of 2025, and they’ve done well for us, but the upside is not as big as it used to be.
But instead of cutting it out in December or November, we just let it ride for the year. It’s a year long pick. And we just show the year long performance and then we get to 2026, we replace it.
So there are a couple names that we’re taking out of last year’s picks and a of new names that we’re bringing in, but we’re sticking to the same recipe and we’re looking at the same kind of category of stocks. So I guess it’s kind of a yes and no, but hopefully that helped expand on that.
Rena Sherbill: Yeah, definitely. Anything that you would about dividends in this space in particular?
J Mintzmyer: The biggest thing with dividends is just be really cautious on and don’t just bite off on a high percentage income yield. So there’s a lot of shipping companies, especially in the past, they’ve had 10, 11% yields, and they brag about how they have fixed contracts.
But what they might not say is that the contracts are only maybe a year and a half long, or maybe only half the fleet is on contract. And so then if you have a market downturn, and the ships need to be recontracted, they can’t cover the big dividend anymore.
And we’ve seen so many stories where the dividend, it was almost like a rug pull, right? Like people got in these income stocks and then suddenly they couldn’t make the payments.
So be really careful in income. It’s not something where you should ever, in my opinion, in shipping, scream by dividend yield, never. The dividend yield can be incidental. You can find a good company and then be happy that they also have a good dividend. But that should not be a starting point. There’s just too many.
And I’m speaking to just general, people, generalists in the audience who aren’t necessarily familiar with the sector. I mean, if you’re on Value Investor’s Edge and you have access to our analytics and you have access to our team, you can sort out some of the good names, right? But if you’re just a generalist and you’re just generally looking at shipping, I would not start with dividend yield.
I would definitely try to search for quality companies and read the quality research and then only after that, you know, figure out what sort of dividend they have, if that makes sense.
Rena Sherbill: The dividend being the cherry on top, not the sundae itself?
J Mintzmyer: That’s exactly right.
Rena Sherbill: And in terms of risks that you see coming, is it mostly uncertainty? Or how would you define the risks that you’re concerned about or looking at?
J Mintzmyer: I think the biggest risk to shipping is the same it’s been all year. It’s really a macro, broad market pullback risk. It’s no secret that the S&P 500 is trading at close to all-time highs. It depends on what metric you use. And I think at ’98, ’99 might be higher. But if you exclude ’99 dotcom bubble, we’re close to all-time record highs and valuations in the S &P 500. And that requires a couple things.
It requires steady economic growth. 2%, 3% minimum GDP. requires a stable job market, a stable consumer environment. Inflation can’t be running away. Interest rates probably have to be below. I don’t want to name a number. I’m not the Fed, but lower than they are now, for sure.
The current interest rates at the Fed are not compatible with the broad market valuations. The broad market valuations are pricing in at least half a percent, if not a full percent in cuts in the next year or two.
And so that’s the risk, I think, is that if the broad market catches a cold, everybody gets sick, and shipping tends to be a little bit more volatile, has a little bit higher beta. It might not impact the fundamentals of our companies, which is how we analyze and invest.
But if the S&P 500 drops 10%, shipping stocks are going to go down too.
That’s our biggest concern and biggest thing that we’re watching. And then of course, if the tariff situation goes back, if the temperature comes back up, if some of the hawks get a bigger voice, and I’m thinking of folks and I don’t mean to cast any shade. I’m just thinking of folks like Mr. Lutnick, some of the President Trump’s advisors who are more hawkish on trade. I’m not saying that’s good or bad.
Obviously shipping, we prefer more trade. If I’m a consumer, I prefer more trade. But if I’m an American worker, I prefer more protections. So those political realities are understood. But if those voices get a louder presence again, that’s going to be challenging for the macro and shipping.
And so what we’re doing is in our value and speculative model, we will have a cash component. So we’re not 100 % invested. We have a slight cash component. And that’s meant to reduce the volatility a little bit in the models and give us some optionality. Maybe we have some dips and we have opportunities to deploy that cash. And we’ll see what happens there.
Rena Sherbill: I appreciate that. What would you say is most talked about with subscribers at Value Investor’s Edge? Is it macro concerns? Are they stock specific questions? What is most of the discussion centered on?
J Mintzmyer: So the discussion really ranges based on who it is, right? And how active they are in the chat platform.
But like I mentioned, we have 700 members on the platform. And every single day, I would say there’s at least 100 unique people discussing things on there. it’s anywhere from here’s my super advanced model on like Zim (ZIM), what do you think? Or what do you think about this earnings forecast? And I’m like, wow, can I hire you to be an analyst on the team? This is awesome.
Or it might be like, hey, I noticed all the oil tankers are down today. Why do you think that is? And we’ll look at some of the news reports or discuss that. Or there’ll be discussion around the latest ceasefire or crane peace deal rumors or this new mine that just opened up. was talking about that.
There’ll be like people share news clips and there’ll be debates about what it means for our companies. Any time an earnings release comes out, people will, of course, the earnings release will be posted and there’ll be dozens of people sharing their thoughts about good or bad or think about it. And so it ranges, it depends.
And I think the chat platform and the overall community we have, I’m just so grateful for it. It is just so enjoyable every day to log in and everyone has been so polite and professional. I think we have a very high, I would call it signal to noise ratio. No one’s posted pictures of their cats and their other sports teams and there’s no memes and you know, it’s a very professional platform, but it’s also very cordial platform and folks are so generous with sharing their own research and their own ideas and just a lot of idea generation that comes out of it.
I love the chat platform. I hope it just continues to grow and improve as our membership gets even bigger.
Rena Sherbill: High quality and kind. Can’t really ask for anything more these days. My gosh, those are good things to have.
J Mintzmyer: It’s true, that’s tough.
Rena Sherbill: In investing and in life, are you the kind of person that takes a moment as the year ends and a new one begins to reflect, or are you pretty much doing that all along the way?
J Mintzmyer: Well, the right answer is that I constantly reflect, but we are creatures of habit and it’s natural for us to get to the end of the year or the quarter or whatever and say, how did we do and how do we reflect?
And one thing I do on VIE is every year I write a letter to the members, but it’s almost like a diary post to my, a journal post to myself. It’s a letter to members, letter to the community, but it’s a lot of kind of self-reflections about, here are a couple of things that did well and here are a couple of things we can work on and here are some highlights. And so, of course, one of the highlights this year will include a picture and talk about the great 10-year anniversary celebration that we had in New York City. And of course, that’ll be one of the highlights.
And then we’ll talk about some of the investment successes we had in the year and then some of the challenges. We’ll probably reflect back on Liberation Day and how we handled that situation, if we could have done better, maybe we could have been a little bit more aggressive with the models in April and May. And we weren’t, right?
We had a lot of cash on the side and maybe we could have been more aggressive. And you got to be careful with hindsight bias and things like that. now this is something we do almost ritualistically at Value Investor’s Edge at the end of the year. As an investor, I tend to reflect the most when I’m reviewing a position.
I’m closing a position, I’m taking profits, or it’s a loser and the thesis has changed and I’m dumping it. I tend to carve out some time to reflect on that. And not to say I shouldn’t sell or whatever, I try to make that decision quick and cold and calculated. But after I’ve sold the position, gain or lose, even a gainer, it’s time to sit back and say, why was this a gainer? Or what could I have done better? Did we maximize the profits? Did I hold on too long? All those sorts of things.
And I encourage that with everybody. You can learn so much. think people spend, I don’t know how much time, but basically all their time studying and reflecting on the losses and the mistakes.
And I think you can actually learn a lot from the winners as well. First of all, how can I do that again? How can I get more winners? But secondly, was it perfect? Probably not. There’s always room for improvement.
Rena Sherbill: Yeah, that’s a very nice reframe for those who need it. Would you say that there was one salient lesson above all this year?
J Mintzmyer: You know, I think Value Investor’s Edge being 10 years old and I’ve personally been involved in the shipping industry now for about 17 years. I think it’s important. You don’t want to get too confident, too cocky, but I think it’s important to trust your process and trust your fundamentals and trust what you’ve built.
I think even this year coming up on our 10 year anniversary, when we got to March and April and we had the liberation day, the tariffs in that situation, I was cautious. I was very concerned about the broad market.
I’d seen how shipping stocks reacted to this news flow before. And I didn’t go full bore. And I mean, maybe that was the right choice. Again, we have to be careful, hindsight bias.
But I think I should have had more confidence and trust in our platform and our system and our fundamentals and just stuck with a little bit more aggressive picks at that point in time.
And I think if we had done that, and this has been a good year. We’re 23% year to date. Again, the Russell is like 12%. The S&P is like 16, 17. So it’s a good year.
But I think if we would have been a little bit more aggressive at that point in time, we might be at 35 % or something instead of 23%. And again, we have to be careful with hindsight. We have a 10-year track record, 38% annualized returns, which is about 25x over the last decade.
And it’s from our approach, from our fundamentals-based approach. And we just have to stick with it and trust the system and realize there’s going to be moments of volatility that are going to test us.
Rena Sherbill: Is that the main thing on your vision board for 2026 or is it like stick to your vision and stick to what’s got you here or is there something else in particular for this year?
J Mintzmyer: I think that’s true. I don’t want to say like be true to yourself. You know, like one of those posters you put on the wall or something. And I don’t want it to be the situation where we learn the wrong lesson.
We’re always fighting the last war and so if we get into ’26 and something bad happens in macro and I’m like, trust the system, trust the gut and then the market blows up, you know. So I don’t want to over learn a lesson.
Rena Sherbill: Yeah, it’s a dance.
J Mintzmyer: Yeah, I don’t want to over learn a lesson, but I think it is important. We have a 10 year track record. We’ve seen all sorts of different types of markets, especially in shipping.
People might say, well, the broad market was bullish. Yeah, mostly. We had taper tantrum. We had COVID. We just had the recent issues, we’ve seen a lot of stuff with all sorts of shipping sectors and the proof is in the pudding, as they say. That’s a weird saying, but it is in there in the pudding.
38% annualized returns, we are going to stick to what got us there. And that’s what’s going to keep propelling us forward. And as we set up these picks in 2026, we are sticking with our highest quality basket of companies we’ve had, probably ever, but if not ever, at least top two, top three years of quality picks.
We do have a little bit of cash. So we’re not going all in. We’re not full bore ahead, abandon all caution here. But we’re using our models, we’re using our systems, and we’re using our approach to hopefully deliver a phenomenal year to our members.
If it’s 23% again, and the Russell’s 12 and the S&P 16, that’s a pretty damn good year. I mean, let’s put it in context. But we want 55%, let’s see if we can do that again.
Rena Sherbill: We want profits and perspective. We want them both. There’s always more to get to, but also a lot to be appreciative of.
I always appreciate our conversations, J, and I know our audience does as well. Always a lot to chew on.
Again, your investing group on Seeking Alpha is Value Investor’s Edge. Anything else you would leave for our listeners as we head into a new year? And again, thanks for making the time.
J Mintzmyer: Yeah, absolutely, Rena. Thank you for carving it out. I think for folks reading, either reading a transcript or listening to the recording, first of all, thank you. I hope we learned something here.
Go look up that CMBT article. It’s free on Seeking Alpha. It’s our top public pick for 2026. James Catlin, he’s our macro guy. We have a team of 11, but he’s our macro guy and he’s written an excellent dry bulk report. If you want to learn more about Value Investor’s Edge, there should be several links, hopefully, when this is published.
But we do have some exciting stuff for you, we have one month trials so you can see the entire platform, see the analytics, see the new website we’re developing, be a part of the chat we were talking about. They’re available for one month and they’re only $500. So you can see everything we got, open kimono, you’ll even see the top picks for 2026. We’re really giving access to everything because we wanna be transparent. We wanna make sure that it’s a good fit for everybody. And so that’s available through mid January. So go ahead and sign up for that.
If you decide after that one month trial that Value Investor’s Edge is right for you, we do have an additional discount on our 2025 rates. We are raising the rates in 2026 for new members. But if you join in January, you’ll get those discounted rates from 2025 and you’ll have that one month trial to decide if everything is right for you.
Feel free to comment below. I’ll engage as well as I can in the comments. If you have questions about VIE, I’m happy to address those as well.
Once again, a Happy New Year 2026 to everybody. And I just look forward to engaging and working together even more in the coming year.