The Investment Timing And Trading Strategies In The Dry Bulk Sales And Purchases Market For Ships

The investment of sales and purchases for ships is an important management activity for shipping companies. The ship price fluctuates badly, so it is imperative for the company to decide when to buy and sell the ships. The analysis of timing for saling and purchasing for ships can help the company to ascertain the right time for investment and divestment and give the theoretical guidance for the company's management and investment activities. So the analysis of timing for the ships' investment can have significance for the development of the company.At present, the researches on the timing of shipping investment are mostly focused on the traditional regression or simultaneous equations models which are based on the premise of the stationary time series. But most of the economic time series are not stationary leading to spurious regression of the models, so that the research results are not satisfactory. Using cointegration theory and the method of dynamic model can avoid the spurious regression and simultaneously the Vector Error Correction Model isolates fluctuation into long-term trend and short-term adjustment which precisely reflects the dynamic fluctuating trait of shipping market. So this paper analyzes this matter by using cointegration theory and setting up the Vector Error Correction Model.First, this paper analyzes the characteristics and connotation of the dry bulk sales and purchases market for ships and the various factors affecting the sales and purchases of ships. On the basis of this the paper analyzes the internal mechanism of the ships sales and purchase market qualitatively. After that it uses the cointegration theory to analyze quantitatively the cointegration relationships of secondhand ship price and the related factors which shows that these factors have the long-term stable relationships. Based on this the Vector Error Correction Model is set up which precisely reflects the dynamic relations between secondhand ship price and the related factors. Finally it analyzes the relations between secondhand price and time charter rates and establishes the moving average investment timing model.The investment timing of sales and purchases for ships is a complicated problem which is involved of various factors and hard to find the common rules. This paper has solved the problem successfully by using the Cointegration Theory, the Vector Error Correction Model and the Price-Earning Ratio notion in the stock market. Through history data simulation, we can see that the VECM model precisely reflects the rules of fluctuation of secondhand price and other relative factors. And the investment timing model also gives the best investment time for the companies and investors...