Framework
Super Tanker Trades
Recognizing large structural forces whose direction has become difficult to reverse
Some of the best opportunities arise not from predicting an uncertain event, but from recognizing a sufficiently large structural force whose direction has become increasingly difficult to reverse.
The metaphor
A VLCC—a supertanker—cannot change direction quickly. Once enough evidence demonstrates that it has turned, the eventual direction becomes easier to anticipate.
Some of the best opportunities arise not from predicting an uncertain event, but from recognizing a sufficiently large structural force whose direction has become increasingly difficult to reverse.
Historical case study: China's industrialization
China's rapid industrial expansion and its structural demand for raw materials is a defining example of a super tanker trade—a secular force large enough that, once its direction was visible, it was difficult to reverse quickly.
What shapes a super tanker thesis
A durable structural thesis depends on how these forces interact:
- Secular versus cyclical change
- Demand persistence
- Capital intensity
- Supply response
- Leverage
- Timing
- What can invalidate the thesis
What can invalidate it
A super tanker thesis is not permanent. Recognizing what would falsify it—an unexpected supply response, a structural shift in demand, or a change in the underlying economics—is as important as recognizing the trend itself.
In-depth essay forthcoming
An extended essay expanding this framework, with case studies, is in preparation and will be published here.