In the Beginning

Outdated – I wrote this article when I was considering a more specific business idea for investigation this summer. I have decided to leave it here because I remain interested in the idea of investing in ships. If you have anything to offer on the idea feel free to contact me. Dan

How to Implement the Freedom as an Asset Class Strategy

This document provides more detail on the specific business model we will explore as a first step in the Freedom as an Asset Class (FAAC) strategy.  If you have not yet read the FAAC strategy document, I suggest that you start there and then return to this document.  The FAAC document provides a high-level view of a proposed twenty-year plan.  In the Beginning focuses on the first two years of the FAAC plan during which a lower risk foundation business will be built.

The Business Idea

Between Miami, FL and Georgetown, Guyana in South America, there are at least 17 markets on the Antilles island chain.  We are exploring the idea of developing a “Bus Service” along the Antilles islands via ferry ships.  Imagine being able to board the “bus” in Miami and travelling all the way to South America, or anywhere in between, on the route.  The system would move both people and cargo (80%+).  Below is a map of the area with the general route highlighted.

The first goal might be to acquire an existing ferry business in one of these markets and expand it into the business described above.  We could also consider a more direct implementation of the “bus line” strategy.  Whatever the case, full implementation of this idea would be a multi-year process.  The near term goal would be evaluating the viability of taking one step in this direction.

The Advantage

So why might a “bus line” approach work here?  Imagine someone who wants to ship cargo from Turks and Caicos (TC) to Dominica.  This very possibly involves shipping from TC to Miami and reorganizing onto a vessel departing for Dominica (major assumption requiring  verification).  Talk about wasted effort and resources!  In order to get the job done, the shipper literally pursues a very long route.  With a “bus line” approach, you or your cargo can travel semi directly to any other point on the line as long as you do not mind waiting through a couple of port stops. (note – there are a number of regional airlines in the islands so moving people is not a problem. Any service for people probably needs an angle such as vacationers spending a few months in the Caribbean. For them, you might sell a pass that let them travel between islands on the ferry as much as they want.)

An Alternative Idea

An alternative way of moving forward might be to look at this more as a private equity venture.  We could partner with local operators who have market knowledge.  Under this model, we might simply buy the ships/boats and then lease them to our partner operators.  This would remove us from the operational and regulatory aspects of being an operator.  I am warming rapidly towards this concept. Finally, I remain attracted to the water business. It would be interesting to generate water on the ship via desalination or Atmospheric Water Generation (AWG) but I am uncertain concerning the technical challenges here.

The Intern’s Task

This summer, the John Galt Project interns will conduct substantial research to either validate or invalidate the proposed business ideas.