| Popis: |
Using shipping sentiment proxies that capture market expectations, valuation, and liquidity, we investigate the role of investor sentiment in the dry bulk sector. This chapter highlights the importance of incorporating the time evolution of market optimism–pessimism into the commercial, operational, and financial decisions relating to shipping assets. We find that sentiment is a contrarian indicator of future earnings and report evidence of cross-sector sentiment contagion. We further infer that total sentiment has a positive impact on earnings’ volatility with high optimism (pessimism) leading to upward (downward) revisions in volatility. Fluctuations in earnings are driven by shocks to the sentiment level and volatility, while there is a two-way feedback relationship between sentiment and vessel earnings. Finally, as investor sentiment provides significant incremental information for predicting earnings and the corresponding volatility, its use can bestow benefits to participants establishing investment strategies and may have policy implications, in terms of stabilizing uncertainty. |
