OT re CCL:
I am scaling in. I have purchases at 21 and 19, more limit orders at 17 and 15. After that, we'll see. And, I'll lighten up beginning at 23.
1. LT, this industry is a winner. Middle-class people like going on cruises. People go on vacation, even in war-time. And this is not going to be a WW2-type war, where all frivolous spending stops for the duration. Quite the opposite, in fact. The Fed and the Feds are doing everything they can, to prop up consumer spending.
2. So far, the targets have been symbols of American power (financial power, military power, the media). A cruise ship full of blue-hairs doesn't fit on that list. I don't think a cruise ship will be a target, any more than any other concentration of people, and maybe less so.
3. When this recession is over, there are going to be few survivors in this industry, and CCL looks to clean up. If you don't like CCL's debt/equity of 0.41, look at the #2 company in the industry, RCL, with a debt/equity of 1.29 And, as you look further down the list, it just gets worse. In comparison to the competition, CCL's balance sheet looks very pretty. Unless you think the banks are going to end up owning everything, you're led to the conclusion that CCL will come out of this recession with a much larger market share, of an (eventually) larger market.
4. If Bin Laden ends up ruling Saudi Arabia, and oil goes to 80$/B, yeah, I lose this bet.
5. CCL is my diversifier. I've been steadily selling my only other non-tech (CMH, a homebuilder).
6. It's the best company in a sector that is profoundly hated at the moment, selling at mid-1990s (= pre-bubble) valuation lows. Last month had the feel of capitulation, a huge gapdown on huge volume, the majority of analysts covering them downgraded and/or slashed earnings estimates, investors were treated to a barrage of highly negative articles and opinions on the sector. |
