• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Bruce Kamich
    • Doug Kass
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • Trifecta Stocks
  1. Home
  2. / Investing

If You're Drawing a Blank, Just Look Around

It's certainly been a useful stock-picking strategy for me.
By TIM MELVIN Dec 23, 2013 | 06:30 AM EST
Stocks quotes in this article: ISH, TNP, SBLK, GSL

Over the years I have developed my own school of economics and analysis that I call the Tim Melvin School of Looking Around. It has been about as accurate as the information released by the folks in all the offices with computer and spreadsheets and has also developed a few investable observations. I recently had a chance to deploy this analysis once again with a fair bit of recent travel. The weekend before last I was up in Detroit to meet with some folks and take in the Monday night football game, and this weekend I drove from Orlando all the way across the country to Rockport, Texas, in order to spend Christmas with the in-laws.

My first observation was in Detroit. Beyond the obvious facts that the city is incredibly cold, and that I will never again go back outside the months of June to September, Detroit is doing better than I think the press may indicate. The downtown revival, led by Dan Gilbert of Quicken Loans, Mike Ilitch of Little Caesars and Roger Penske appears to be working. That area of the city was brightly lit for the holidays and, in spite of bone-chilling cold, folks were out at the restaurants, bars and casinos while I was there. The problems the city will face are outside of downtown, where there are tens of thousands of empty properties -- but the city is off to a good start in rebuilding.

There are no banks headquartered in Detroit, but one of my projects for the weeks ahead is to research the smaller banks in the areas right around the Motor City. I said earlier this year that the first Detroit bank initial public offering is bound to make a fortune for early investors, and I stand by that idea. If I had the resources, I would raise a real estate investment trust right now in order to buy the A and B office properties outside the immediate downtown area, as they are cheap and will appreciate substantially over the next decade as Detroit works out its problems.

My next observation is that, for the week before Christmas, travel was not as bad as I have seen -- but it was much heavier than the last couple of years. The north was heavy with traffic, but that's to be expected, given the number of folks form the Northeast and Midwest who wised up and moved south. I'd describe the east-west traffic between Florida and Texas as "moderate" for the week before a holiday. Gas prices seem to be falling across the country, and we saw several stations with sub-$3-per-gallon gas in the lower-tax states. Lower gasoline prices are one of the best forms of fiscal stimulus that can be provided for those who do not work on Wall Street, so that's a hopeful sign ahead of the new year.

I have been invested in hotel REITs, and from what I saw on my journey, there is no reason for me to sell them just yet. The business is performing much better now that it had done when we started buying, but it still has a long way to go in order to be fully recovered. Prices have recovered, but room rates are still very reasonable and occupancy rates are just OK. We broke up the trip and stopped along the way, and had a very nice hotel with a big room-service dinner -- and the bill for everything was lower than what we have spent for dinner on special occasions.

We also passed through and took short side trips around the ports in both Mobile, Ala., and Houston. I came up with two concrete conclusions from this excursion. First, young female children do not think ports and ships are very interesting and, second, I am more thrilled than ever with my shipping investments. Mobile handles forestry products, coal and other dry cargoes. Meanwhile, most of what's coming in and out of Houston is petroleum-related, but most Volkswagens sold in the U.S. pass though there as well.

Both ports were remarkably active for the week before a major holiday. There was plenty of traffic in tankers and containers alike, and the yards appeared to be busy as well. My portfolio is loaded with shippers right now. However, after having passed through the port areas, I feel better than ever about stocks like International Shipholding (ISH), Tsakos Energy (TNP), Star Bulk (SBLK) and Global Ship Leasing (GSL). They all still trade well below book value and look like fantastic long-term opportunities.

So, once again, you can observe a lot just by looking around. Who knew Yogi Berra would turn out to be such a brilliant economics and markets analyst?

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

At the time of publication, Melvin had no positions in the stocks mentioned.

TAGS: Investing | U.S. Equity

More from Investing

Stay on Track While Interpreting the Dow Theory and CSX Corp.

Bruce Kamich
May 19, 2022 2:26 PM EDT

Some investors may be asking whether we're seeing another 'nail in the coffin' of the secular bull market as several transport names get downgraded. Let's not ... go off the rails.

TJX Cos. Is Ignoring the Market's Downdraft

Bruce Kamich
May 19, 2022 1:25 PM EDT

Does this strength have staying power?

These ETFs Will Meet You in the After-Hours Club

Mark Abssy
May 19, 2022 12:30 PM EDT

Let's check three funds that are set to buy the close and sell the open.

After Wednesday's Bloodbath, a Battle Is Brewing in the Market

James "Rev Shark" DePorre
May 19, 2022 11:56 AM EDT

We see traders hunting for an oversold bounce, while investors are dashing for the exits. Here's my take on the wild action so far -- and whether we're in a recession yet.

Kohl's Fundamental Story and Charts Are Both Problematic

Bruce Kamich
May 19, 2022 11:15 AM EDT

There's a key price level to watch.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 01:44 PM EDT STEPHEN GUILFOYLE

    Stocks Under $10 Portfolio

    We're making a series of trades here.
  • 03:07 PM EDT PAUL PRICE

    Why Is Walmart Down Big Today?

    Besides its poor earnings report Walmart was way...
  • 07:14 PM EDT PAUL PRICE

    A New, Very Scary Movie

  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2022 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login