URSABLOG: The Long Summer Read

Over the last few weeks I have been dipping in and out of museums and theatres both here in Athens and elsewhere in Greece. Without giving you a full rundown of my travels, it was as I was watching a productionThe Persiansby Aeschylusat Epidaurus that I was again struck byhow sophisticated Classical Greece was. I don’t just mean the architecture or the sculpture but the literature, the public conversation the Greeks were having with each other.

Imagine this. Ten years ago your country suffered the most terrible invasion by a colossal foreign army who not only destroyed your city but violated all your sacred places, so much so that you have vowed never to build on them again. It was only a mixture of arrogant stupidity on the part of the invaders and shrewd strategy combined with extraordinary bravery (with some very astute leadership) by the defenders that saved the day, and caused the enemy army to flee, destroyed, in disarray.

How did Aeschylus decide to commemorate this? Well instead of a triumphalist blow by blow account of the feats of the victors, he wrote a play from the point of view of the losers, exploring how and why they had gone to war, and how and why they had been defeated. From this perspective perhaps he was warning the citizens of Athens to avoid making the same mistakes the Persians had, and learn some humility in her dealings with the rest of the world. In doing so, he even acknowledged the role that Sparta, by then an enemy city, had played in repelling the invaders. But these lessons, although initially acknowledged, were eventually forgotten as Athens suffered one military disaster after the other, before finally admitting defeat, not to barbarian foreigners, but to other Greeks.

This period of conflict and war produced the greatest advances in art, philosophy, architecture and science the world had ever seen in such a short space of time, and arguably hasn’t seen such a period like it since. Tension breeds creativity.

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Back in Athens I happened to watchThe Third Managain. Directed by Carol Reed, with a Graham Greene screenplay and starring Orson Welles as Harry Lime, it is a brilliant film, filmed in noirish Vienna just after the Second World War. Themost famous line comes from Lime himself:

Like the fella says, in Italy for 30 years under the Borgias they had warfare, terror, murder, and bloodshed, but they produced Michelangelo, Leonardo da Vinci, and the Renaissance. In Switzerland they had brotherly love - they had 500 years of democracy and peace, and what did that produce? The cuckoo clock.

Lime is by no means the hero of this thought provoking and moving film which explores the moral ambivalence of the black market, and how innocents are caught up in it and harmed. Maintaining personal integrity in such times is difficult, and means in many cases defining your own morality, backing it, and still failing.

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The plays of ancient Athens, as well as the Homerian epics before (and the philosophy afterwards) was part of this conversation as people, both as individuals and communities, were trying to come to terms with their place in a difficult, violent and fast changing world. The result was astounding progress, but in that progress were planted the seeds of eventual destruction.

Progress is never guaranteed: it has to be safeguarded. I am particularly depressed at the moment by the irrational rantings coming out of the White House about the moral equivalence of fascist and anti-fascist protesters. I will leave the political commentary to others, but it is the ignorance, and the celebration of ignorance that depresses me most. In all periods of great human advancement, from Ancient Greece, the Byzantine Empire, the Renaissance, the Enlightenment, the Industrial Revolution, and all the gains we have made in the 20thand 21stcentury, there have been periods where ignorance and futility have threatened progress, and at great cost to human life and knowledge. Not only have these dark movements been defeated, they have proven to be wrong. Ignorance was the enemy; truth triumphed but it needed courage to not just talk to power, but to argue with it, persuade it, and even fight it to the death to prevail.

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It is hard for all of us to work out what the truth is of course, especially in business, and especially I would argue in shipping. Because investment is speculation, it is based on assumptions, but we have to take care on what we base these assumptions on. It is easy to follow the herd, but harder to find out what is guiding the herd. And the truth we do decide upon will always be limited by our own perspective and context.

Let me give you an example from a recent market report from a competitor:

As the world nervously watches developments between the USA and North Korea the shipping markets are watching the BDI moving forward like a rocket and well passed the psychological barrier of 1,000. Is this a portent of even better times ahead in Q4 or the frequent cycles of Chinese commodities buying? Certainly asset prices continue to look very attractive against their long term average prices in dry bulk.

Apart from the rather unfortunate mixing of metaphors (North Korean rockets are very bad, but the BDI moving like a rocket is very good) the author fudges an analysis of a complicated world situation by saying, more or less “well prices are low so you may as well buy”. The truth behind this assumption is at best anecdotal, and whilst it may turn out to be correct, very clever people were acting on the same simplistic formula in 2013 and early 2014 when they bought bulk carriers, and they regretted their actions very soon after. It is not enough to repeat a platitude to act on it, but we have to be satisfied with the truth behind it.

You may well say that I am criticising what is after all just marketing; us brokers have to produce reasons to buy or sell ships, otherwise we would not survive. I am reminded of a story told by a friend who attended a meeting between a very strong Greek shipowner and a very famous S&P broker. The broker had come armed with an elaborate pitch about why it was time to buy capes. After 45 minutes of detailed analysis of graphs and statistics, the broker triumphally concluded that now was a golden opportunity to order newbuildings, and how many did the owner want? The owner, who had not spoken during the whole presentation said, after a short pause:

“Well actually, we are more sellers than buyers in this market”.

Without missing a beat, the broker then used the same analysis to agree with the owner, and left the office with an exclusive mandate to sell two of the owners’ capes. My friend was flabbergasted: how could the broker be so shameless? I viewed it slightly differently: I wish Icouldbe so shameless. The big owner took another view I suppose: this guy is so shameless I want him on my side. A variation of the Corleone dictum:Keep your friends close but your enemies closer.

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The truth behind the broker’s report I quoted earlier is deniable. That’s its awkward beauty I suppose. Yes prices are historically low, but could the market get worse? There is a difference between not knowing the future (which we are all guilty of) and the wilful ignorance of the facts as we have them. After all, actively ignoring the facts, and being ignorant of them (specifically to be in want of knowledge) amounts to the same thing: it requires a conscious act of negligence.

I was at dinner with an owner friend of mine this week who was bemoaning the lack of respect shown by my brother and sister brokers. Not just a lack of respect to clients, or to the craft of broking, but to the industry itself. Broking was a vehicle for their self-advancement and small things like facts and a duty of care for their clients were obstacles to be overcome in that quest. I tend to agree with my friend. Brokers, in a legal sense, are agents who act on, and within the limits of, their principal’s authority. In an ethical sense they also have a duty of care to their clients and their business. Ignorance of the market, of the facts, of what is going on, is not a barrier to success, but apparently an aid to achieve it.

But there is something bigger than this, bigger than shipping, bigger than business, even bigger than President Trump’s unfortunate ego. I strongly believe that in our daily dealings with those around us that we have a moral duty to not only present the facts as we find them, but also to keep educating ourselves to make ourselves better informed, and then share that knowledge. In Charles Dickens’ short novelA Christmas Carol(not the season I know),the Ghost of Christmas Present says, pointing to two desolate children sheltering under him:

This boy is Ignorance. This girl is Want. Beware them both, and all of their degree, but most of all beware this boy, for on his brow I see that written which is Doom, unless the writing be erased.

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I came across a remarkable video on Facebook this week,produced in 1947 by The US War Department and calledDon’t be a Sucker.It’s a film that challenges racism and fascism in America and it is refreshing to watch even today. One passage struck me very much:

You see we human beings are not born with prejudices. Always they are made for us. Made by someone who wants something. Remember that when you hear this kind of talk. Somebody is going to get something out of it and it isn’t going to be you.

 

Prejudice can be defined as “preconceived opinion that is not based on reason or actual experience”, in other words an opinion made in ignorance. Prejudice is not a good basis for investment.

Aeschylus warned his fellow Athenians that even though they were subject to no man, they had a responsibility to each other. Eventually they were persuaded to forget this wise advice, and lost their hard fought for wisdom in the name of glory, and ended defeated. They ignored their own history in favour of a fantastic future, which never came. They ignored their own truth, and succumbed to prejudice,  inflated by their apparent invincibility.

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This is a longer blog than usual because I am giving myself, and you, the next week off. I hope you have had, are having, or will have the opportunity to relax in the best way that suits you. Like many of you I have had the opportunity this summer to think about how I have arrived at this point now, and where I am going. I have come to the following conclusions:

-         It is important to engage with as many people as possible to inform or disprove our opinions

-         It is important to keep learning to actively avoid ignorance and prejudice

-         Success is not measured in numbers

-         What we do in life and the decisions we make define us, for better and for worse

-         Life never stops

-         We never arrive at our destination

I can pinpoint in my life the mistakes I have made when I have not followed my own advice.

So now I feel I have a duty to the truth, and to keep looking for it. This is a big ask, and a difficult one. As a broker I have to do deals, and this involves all the dark arts of marketing, negotiation and execution that leads to successful transactions, and therefore enable me to continue to make a living. Despite many believing deceit is just another weapon in the brokers’ armoury, I disagree. I think it is possible to be a broker, and a good one, and be honest and truthful. It’s tough, but I still agree with Simone de Beauvoir:

 

I tore myself away from the safe comfort of certainties through my love for truth - and truth rewarded me.

 

My students at the Institute of Chartered Shipbrokers often ask me, usually over drinks, “what makes a good broker?” This is a loaded question, and I usually answer it by saying they are the ones who have the respect of their clients and their competitors alike. They also ask “what defines a successful broker?” I fudge it by replying “It depends on how you define success.”

We all have different definitions of success, and I would not want to comment on what drives other, better brokers than me. For me alone, success means being able to sleep at night with a quiet conscience (professionally at least), and be able to enjoy a life where I can continue to learn new things, whether personally, emotionally, academically or professionally. I have come to the happy conclusion that shipping has provided and continues to provide all this for me, and now, finally, I can call myself truly successful.

 

Simon Ward