FYI: DRYS reports earning after the close of the market on Monday. 08Q01 EPS
est. $4.05. 07Q4 EPS was $4.50,

I expect them to miss estimates and possibly miss badly. This could be a very
good buying opportunity if the stock has a pull back.

I compared the charts for the spot day rates of the Dry Bulk Index for the last
year. I estimated the average rates for each quarter. About 65% of Dryships
ships are spot rate contracts.

1. 08Q1 and 07Q3 had very similar rates. If anything, 08Q1 was slightly lower
then 07Q3. Dryships earned only $2.38 EPS for 07Q3. 08Q1 est. $4.05.
2. Q1 Capesize day rates were about 35% lower then 07Q4, EPS estimates are only
10% lower.
3. Q1 Panamax day rates were about 26% lower then 07Q4, EPS estimates are only
10% lower.

Case for the Strong Buy.

1. Last year’s closing price high was on 10/29 at $130.97, over $20 less then
Friday’s closing price.
2. Current Capesize day rates are at an all time high, about $18,000 above Nov.
highs. Panamax day rates are close to the Oct. highs.
3. Commodity demand should at least stay strong or even increase with China’s
continued infrastructure build ahead of the Olympics and rebuilding of the
earthquake damaged areas. A high percentage of the Dryships’ fleet is
contracted in Asia.
4. Demand for ships should continue to be strong for at least another year. The
bulk of the new ship builds won’t be completed until late 2009 or 2010.

It’s my opinion that the both the Dry Bulk Index and Dryships stock price
should continue to rise until at least mid fall.

Disclosures: I’ve only been playing “the game” for a little over a year.
Long DRYS.