My Worst Investment Ever Podcast Oeystein Kalleklev – Shipping’s Brutal Truth: Adapt or Die
BIO: Oeystein Kalleklev is the outgoing CEO of Flex LNG and Avance Gas. He has prior experience as CFO of Knutsen NYK Offshore Tankers and Umoe Group and Chairman General Partner of MLP KNOT Offshore Partners.
STORY: Oeystein has been part of some terrible investments made by his employers. One invested $150 million to become the biggest shareholder of a mine in Guinea, which was lost due to a bad regime. During the great financial crisis, another invested $300 million into a bioethanol plant in Brazil.
LEARNING: In a dynamic industry like shipping, you must think more about adapting and being tactical rather than strategic.
“You have to be really disciplined when you are in a cyclical industry. Observe where the market is going, and learn how to adapt.”
Oeystein Kalleklev
Guest profile
Oeystein Kalleklev is the outgoing CEO of Flex LNG (NYSE/OSE: FLNG) and Avance Gas (OSE: AGAS). He has prior experience as CFO of Knutsen NYK Offshore Tankers and Umoe Group, as well as Chairman General Partner of MLP KNOT Offshore Partners (NYSE: KNOP).
Worst investment ever
Oeystein has been part of some terrible investments. In one case, a family Oeystein worked for had invested about $150 million to become the biggest shareholder of a mine in Guinea. The country was under an unstable regime, and the leader was assassinated. There were also so many operational hiccups operationally. That $150 million turned out to be like $3 million when they sold their last share.
He has also been involved in bioethanol production in Brazil, where a company he worked for invested about $300 million into a bioethanol plant in Brazil during the great financial crisis. The bosses had to restructure the whole company, and Oeystein had to go to the US to talk to bondholders, trying to get them to choose whether to become shareholders or take a big hit on the bond loans.
In another case, Oeystein was involved in a nickel mine in the Philippines where the company he was working for was building a floating production ship for oil. The budget was $280 million, but the company spent $500 million on that building project, and it also took one and a half extra years to complete.
Lessons learned
- When you have such a dynamic industry as shipping, you must think more about adapting and being tactical rather than strategic.
- Focus on running your ships efficiently—it’s a critical success factor.
- Shipping is a lot about market timing. Read the market, know where it is going, when you should exit, and when you should invest.
- You have to be knowledgeable about technology because technology changes quite often in shipping.
- Be smart about running a shipping company. Do it lean and follow the technology.
Andrew’s takeaways
- It’s hard to set a long-term strategy in an industry such as shipping because you’ve got to adapt to what’s happening in the market.
- You have to run ships efficiently, or else you will miss the core aspect of your business.
Actionable advice
If you want to venture into the shipping industry, you must properly understand shipping because it’s not as straightforward as people think. It’s not just about moving goods from A to B.
No.1 goal for the next 12 months
Oeystein’s number one goal for the next 12 months is to read more books to be on top of contemporary issues and be a successful shipping investor.
Parting words
“Thank you for inviting me. I will be listening to a few more episodes.”
Oeystein Kalleklev
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Connect with Oeystein Kalleklev
Andrew’s books
- How to Start Building Your Wealth Investing in the Stock Market
- My Worst Investment Ever
- 9 Valuation Mistakes and How to Avoid Them
- Transform Your Business with Dr.Deming’s 14 Points
Andrew’s online programs
- Valuation Master Class
- The Become a Better Investor Community
- How to Start Building Your Wealth Investing in the Stock Market
- Finance Made Ridiculously Simple
- FVMR Investing: Quantamental Investing Across the World
- Become a Great Presenter and Increase Your Influence
- Transform Your Business with Dr. Deming’s 14 Points
- Achieve Your Goals