All signs are pointing towards a shipping rebound. This has become my most attractive investment idea. I will have to find shipping companies that are:
a) trading at significant discounts to book value
b) profitable, or have a high chance of converting from unprofitable to profitable in the near future
c) Geographically distributed. Unless I can get some kind of edge in determining in which areas the rebound in trade will be most pronounced, I may be best suited to distributing my picks to reduce my downside. For example, I could go with an Asia bias in the shipping portfolio. However, this would leave me with too much exposure to a pop in the Chinese and Hong Kong real estate bubble (which would decrease local shipping for Iron Ore). I would likely have to do hours of research to reduce these kinds of risks in my stock selection.