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SS/RCCL Finances: Improving, Options, Questions??!!


TLCOhio
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19 hours ago, AmazedByCruising said:

Personally I think when Putin dies, he's just dead. Like a cat

 

I hope you are right.  Except for the cat.  I had a beloved cat; that cat loved me.  I would like to see that cat at the Garden's Gate, if I am allowed to enter the Garden, waiting for me.  

 

If there is an Inferno as Dante described it,  Putin and those of whom were/are like him surely ought to be residents.  

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Focusing back on the subject for this thread, here is more on the SS/RCCL finances. Below are the stock charts for the trends on the values of Royal Caribbean and the other two major companies during this past week. 

 

Is it easy to summarize?   Yes!  The trend was down, down, DOWN.  Even at a time when the CDC, states, cities, etc., are removing their masking requirements and shifting to a "Live with It" approach for Covid, the Ukraine War and Russian cruise shut-down must be driving this negative trend for cruise stock values.  That's my educated guess and speculation.  Right or wrong?  Other theories for this negative outlook towards the cruise industry by the financial/investment types?  Clearly those on Wall Street do not see a "return to normal" for cruising happening as quickly as the cruise executives have been hoping and wishing.

 

And after the "crash and burn" of Crystal Cruises, it makes all of us question . . . how secure and safe will your advanced deposits and payments be for cruises six, twelve and eighteen months off in the future?  Right now, i would somewhat, maybe, trust the three major cruises line and their cash-on-hand resources to sustain themselves.  BUT, I would not want to have too much in FCC or cash locked up in their accounts.  How much risk is reasonable right now?  Wall Street, based on the past week's performance, is having some doubts and questions.  

 

THANKS!  Enjoy!  Terry in Ohio

 

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From the Wall Street Journal late Friday afternoon, below are the stock charts for the three major cruising ship lines.  One word summarizes this past week.  It is?  DOWN!:

(Open your screen/viewer wider to see these visuals larger/better!)

2022863416_ScreenShot2022-03-05at7_46_16AM.thumb.png.aef97f88da2eb79c0666ab289643ddf4.png

 

503695374_ScreenShot2022-03-05at7_46_45AM.thumb.png.2923a88148aa5ca3ce8fab7285ea0954.png

 

797985832_ScreenShot2022-03-05at7_47_16AM.thumb.png.580fb0f0903e53867a3b96e45c6c245f.png

 

For the past twelve months, here is the "roller coast" ride, up and down, over and over, for the value of the Royal Caribbean stock.  Would you feel very sea sick following such a "rocky" ride? Think how it would have felt if you were the former owner of Silversea who held a huge amount of RCL stock after his sale to Royal Caribbean?:

880202584_ScreenShot2022-03-05at8_02_24AM.thumb.png.a5145da0f456c8a532a82a43e7299cd6.png

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6 hours ago, Stumblefoot said:

My two cents, look to the price of oil.

 

Yes, that's more important than not being able to sail to St Petersburg. 

 

 

 

8 hours ago, TLCOhio said:

Right now, i would somewhat, maybe, trust the three major cruises line and their cash-on-hand resources to sustain themselves.  BUT, I would not want to have too much in FCC or cash locked up in their accounts.  How much risk is reasonable right now?  

 

You cannot really sell FCC can you? Unless -I guess- it's from a cancelled cruise. So if you have it, keep it but don't buy more on a ship for a few percent rebate. 

 

I think I'm buying CCL again when it gets below $15 or so in the next week. Not trying to sound dramatic, but it's basically a win or who cares bet.

 

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9 hours ago, TLCOhio said:

 BUT, I would not want to have too much in FCC

 

I would not have accepted FCC for canceled cruises in lieu of cash.  The offers, I think, sounded so good.  But.....    I have a small future cruise deposit that is refundable on demand or on an expiration date.  I am comfortable with that.  

 

9 hours ago, TLCOhio said:

"Live with It" approach for Covid,

 

Indeed, we are.  I think Covid is having a less important impact on cruise industry stocks than it did.  

 

The uncertainty with the price of oil and the Ukraine situation is the movers downward, I think.  

 

5 minutes ago, AmazedByCruising said:

I think I'm buying CCL again when it gets below $15 or so in the next week. Not trying to sound dramatic, but it's basically a win or who cares bet.

 

Unless my memory serves me incorrectly--again--CCL never reached that low during the Great Recession.  It's price was always higher than RCI.  I like your thinking of a basically "a win or who cares bet".  That was my thinking when I bought RCI just above its low a few years ago.  

 

Receiving my CCL proxy statements and reminding me of how many shares of CCL I own, another couple of hundred shares bought might be a better financial decision than keeping the money sitting in the accounts that it is.  

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1 minute ago, rkacruiser said:

Unless my memory serves me incorrectly--again--CCL never reached that low during the Great Recession.  It's price was always higher than RCI.  I like your thinking of a basically "a win or who cares bet".  That was my thinking when I bought RCI just above its low a few years ago.  

 

Receiving my CCL proxy statements and reminding me of how many shares of CCL I own, another couple of hundred shares bought might be a better financial decision than keeping the money sitting in the accounts that it is.  

 

CCL went down from 22 to 17.23 in a few weeks. 

I don't need gamble with money I need for food so in that sense I don't really care, but I meant "who cares" quite literally, as in a big war might be started soon. 

 

My hand is hovering above the buy button, but I think I can get more shares for my money next week. Besides greedy, I'm cynical as well 🙂 (And to be honest, I'm playing with about $20K. I can afford to lose it, when I lose my house gets upgraded a bit less.)

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49 minutes ago, AmazedByCruising said:

CCL went down from 22 to 17.23 in a few weeks. 

 

Yes, but never as low as RCI dropped.  

50 minutes ago, AmazedByCruising said:

gamble with money

 

No intent to do so with my resources.  Given my age and the expert recommendations of what percentages my portfolio's resources should be allocated, it may be unwise for me to consider to add to my position to CCL.  I am equity heavy as it is when I consider the "recommended" percentages for an investor of my age.  

 

I am going to follow what happens and if a "limbo dance" with either--or both--of CCL and RCI  continues, I may call my financial advisor and learns what he thinks.  

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22 hours ago, rkacruiser said:

Yes, but never as low as RCI dropped.  

 

Also in percentage wise? 

 

22 hours ago, rkacruiser said:

I am equity heavy as it is when I consider the "recommended" percentages for an investor of my age.

 

Yeah, I guess the recommendation is to have at least some money in a bank account. Not sure about US inflation, but Euros are losing value quickly and banks offer a negative rate. You can calculate "today I lost 10 euros to inflation, and 1 for inflation, and then the tax man feels he should punish you for not having spent all your money on whiskey and beer. A wild rover's advise could be best 🙂

 

23 hours ago, rkacruiser said:

I may call my financial advisor and learns what he thinks.  

 

Unless it's not his job, if you have him on the phone, also ask: "if you are so smart, why are you a financial advisor?".  All the advise I got from the "professionals" have turned out to be a bad idea. 

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18 minutes ago, AmazedByCruising said:

All the advise I got from the "professionals" have turned out to be a bad idea. 

Same here with one exception, and we have stuck to that person like glue.

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1 hour ago, QueSeraSera said:

Same here with one exception, and we have stuck to that person like glue.

 

Yes, I have bounced around between a couple.  The ones whom I left were more interested in fattening their commissions by providing me with recommendations that I knew darn well were not in my best interest.  The one that I now use is a gentleman who inherited my accounts from a previous advisor.  Both gentlemen have provided wise guidance.  

 

1 hour ago, AmazedByCruising said:

Also in percentage wise? 

 

Don't know.  

 

1 hour ago, AmazedByCruising said:

I guess the recommendation is to have at least some money in a bank account

 

"A bird in hand is worth two in the bush."  No doubt that inflation and the value of one's nation's currency is an important factor.  In the United States, those of us who have been suffering for quite some time with very low interest rates paid on the money we have in a bank account are about to see a positive change, I think.  Our Federal Reserve meets soon and I thought that we would see a one-half percent rise in interest rates because of inflation.  Ukraine throws a monkey wrench in what they might do.  

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On 3/5/2022 at 10:53 AM, Stumblefoot said:

My two cents, look to the price of oil.

 

YES!!  Agree strongly with the above wise comment as to how the fast-rising oil price is impacting the value of cruise ship stocks.  By late Monday morning, you can see the sliding value of Royal Caribbean below.  Down 5.4%!!!   Carnival is down 4.5% and Norwegian is sliding negative by 5.9%.  

 

The Wall Street Journal had this headline: "As Oil Tops $130, Some OPEC+ Members Say Rally Is Driven by Panic" with this link: 

https://www.wsj.com/livecoverage/russia-ukraine-latest-news-2022-03-07/card/as-oil-tops-130-some-opec-members-say-rally-driven-by-panic-dXJHPeuw4LfgTKVKRRMl

 

Here are some of the WSJ story details late this morning: "As oil prices surge above $130 a barrel, some members of a crude-producers alliance called OPEC+ say the rally is currently being driven by panic—and not a demand-supply mismatch in the market.  Oil prices hit a multiyear high Monday on concerns about supply disruptions after Russia’s invasion of Ukraine. The threat of a potential ban on imports of oil from Russia, one of the world’s top oil and gas exporters, is fueling the rally higher.  But the Saudi-led Organization of the Petroleum Exporting Countries and its Russia-led allies, together called OPEC+, is staying pat for now on production plans, according to some of its members."

 

If things stay at $130 a barrel, that will sharply impact cruise lines in their direct costs, plus cause many middle-income travelers to cut back on their potential cruising desires/interests.  Many people have paying for groceries and funding gasoline for their cars as a higher priority than sailing on a vacation trip.

 

THANKS!  Enjoy!  Terry in Ohio

 

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From the Wall Street Journal late this morning, here the chart reflecting the major and continued downward slide for Royal Caribbean stock value.:

(Open your screen/viewer wider to see this visual larger/better!)

594294709_ScreenShot2022-03-07at11_19_34AM.thumb.png.cc417de8df1b783a43785a23bdba3910.png

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15 hours ago, rkacruiser said:

In the United States, those of us who have been suffering for quite some time with very low interest rates paid on the money we have in a bank account are about to see a positive change, I think.  Our Federal Reserve meets soon and I thought that we would see a one-half percent rise in interest rates because of inflation.  Ukraine throws a monkey wrench in what they might do.  

 

Excellent comments and discussion about financial advisors, interest rates, etc.  Many good insights and questions about the future trends.  For those unhappy with the current low-yields on savings investments, my sense is that the head of the Federal Reserve is in the middle of a bi-polar state of torn/mixed confusion.  To rein in inflation, higher rates are needed.  BUT, as interest rates go up, it will slow some other parts of the economy, including home building/sales, cost the Federal government more to finance their $30 TRILLION in debt, etc.  Very challenging bind!!  Like being between a rock and a hard place?

 

From Forbes magazine this morning, they had this headline: Economic Forecast 2022 And Beyond: Good Now, Scary Later with these highlights:The economic outlook for 2022 and 2023 in the United States is good, though inflation will remain high and storm clouds grow in later years.  The war in Ukraine raged with uncertain outcomes while this forecast was prepared. The war will play only a small role in the American economy—unless it really turns into World War III, which doesn’t seem likely.  A reporter recently asked, 'What’s the most important economic statistic for business leaders to follow in 2022?' It is not an economic statistic; it’s Covid. The best working assumption for an economic forecast is that Covid has less impact, thanks to vaccinations and past infections. Assume no more lockdowns and people will dine out, travel and go to concerts. But keep your fingers crossed, as new variants are quite possible.  Economic growth will be pushed up by past stimulus, both fiscal stimulus and monetary stimulus. No additional major stimulus will come this year, but stimulus always works with time lags. So this year’s economy is mostly driven by past stimulus.

 

Here is more that might be of interest: "Most of our supply chain problems have been labor problems, and the shipping and production issues will be slowly resolved. Optimistic is justified, but gradually, not immediately.  Short-term interest rates will move up from about zero now to just under 2% by the end of 2022, with another two and a half percentage points of increase over the course of 2023. This is a much larger gain than most economists are forecasting, and much higher than the Fed’s policy-making officials expect they will have to do. But continuing high inflation will lead to changes opinions.  The Fed will also shift from keeping long-term interest rates down through their purchases of treasury bonds and mortgage-backed securities.  The Federal Reserve has a huge challenge in that their policies work with time lags. The time lag from Fed action to employment is about one year, and the time lag from action to inflation is about two years.  Business leaders should expect that in 2024 and beyond, the economy will be more cyclical than they have experienced over most of their careers. The booms will be boomier, and the busts will be bustier.  The near-term outlook is solid because of past stimulus, but the later years bring great risk of recessions."

 

Is that all clear and easy to understand?  Economics is not always simple, right?  This Forbes' column was written by Bill Conerly, an economist with a Ph.D. from Duke with a variety of business and policy institute experience.  .  

 

Full story at:

https://www.forbes.com/sites/billconerly/2022/03/07/economic-forecast-2022-and-beyond-good-now-scary-later/?sh=378e31c65353

 

THANKS!  Enjoy!  Terry in Ohio

 

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3 hours ago, TLCOhio said:

If things stay at $130 a barrel, that will sharply impact cruise lines in their direct costs

 

I think most cruise lines have the ability to tack on a fuel surcharge buried in the contract fine print which no one reads. Yes, cruise lines will be paying much more for fuel, but they're able to pass on some of that increase to consumers, so this doesn't all flow to the companies' bottom lines. I remember fuel surcharges being added by cruise companies, probably back in 2008 when oil prices soared above $100. The good news is that oil prices can change just as dramatically on the way down: back in 2008, oil peaked around $145 and then dropped to $31/barrel in just five months. 

 

Much of this is market driven. Just look at auto gas prices in the US: prices have surged by nearly $1/gallon in the past two weeks, even though there is no current shortage of gas, and all the gas being sold was already in the product lion pipeline before the current world events. I've never understood why a possible future shortage should affect the price we pay today for fuel drilled and refined weeks or months ago. 

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While my crystal ball remains in the shop, I think fuel surcharges for cruises are on the horizon.  Those have been imposed in the past, I have paid them, and I don't think such a charge depressed cruise bookings.  

 

33 minutes ago, cruiseej said:

there is no current shortage of gas,

 

God forbid that rationing of gas is needed again.  I remember those gas lines of the past and when one could only get gas based on a specific determiner.  

 

3 hours ago, TLCOhio said:

 Short-term interest rates will move up from about zero now to just under 2% by the end of 2022, with another two and a half percentage points of increase over the course of 2023.

 

That is a forecast that I have not read, specifically for 2023.  "Happy Days Are Here Again" for savers, if this is true?  Unhappy days for investors?  

 

3 hours ago, TLCOhio said:

BUT, as interest rates go up, it will slow some other parts of the economy, including home building/sales, cost the Federal government more to finance their $30 TRILLION in debt, etc.  Very challenging bind!!  Like being between a rock and a hard place?

 

Yes!  I think the Fed Chair is up for re-appointment.  If I was he, maybe a time to consider retirement from the Fed Chair job and become a "distinguished Professor of Economics" at some University?  

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54 minutes ago, cruiseej said:

I think most cruise lines have the ability to tack on a fuel surcharge buried in the contract fine print which no one reads. Yes, cruise lines will be paying much more for fuel, but they're able to pass on some of that increase to consumers, so this doesn't all flow to the companies' bottom lines. I remember fuel surcharges being added by cruise companies, probably back in 2008 when oil prices soared above $100. The good news is that oil prices can change just as dramatically on the way down: back in 2008, oil peaked around $145 and then dropped to $31/barrel in just five months. 

Much of this is market driven. Just look at auto gas prices in the US: prices have surged by nearly $1/gallon in the past two weeks, even though there is no current shortage of gas, and all the gas being sold was already in the product lion pipeline before the current world events. I've never understood why a possible future shortage should affect the price we pay today for fuel drilled and refined weeks or months ago. 

 

Appreciate these great comments and follow-ups from our friends in Holland, Philadelphia and SW Ohio.  

 

From the Wall Street Journal late this afternoon below, you can see the final pricing slide for Royal Caribbean today.  Nearly 10%!!!???  Carnival was down 9.9% today.  Norwegian plunged negative by 11.6%!!

 

Can anyone remember in history such a large of drop in just one day?  It was a dark day for the overall stock market, plus even more dramatic as to these three cruise ship lines.  What happens later this week?  Recovery or more of a dropping valuation?

 

THANKS!  Enjoy!  Terry in Ohio

 

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What a big, BIG drop today in the value for Royal Caribbean.  My memory is limited and not perfect.  But, this is the largest drop I can remember in recent times.:

(Open your screen/viewer wider to see this visual larger/better!)

2096479257_ScreenShot2022-03-07at4_38_42PM.thumb.png.c740b203d76386f0641292f28c0719c2.png

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6 minutes ago, TLCOhio said:

What happens later this week?  Recovery or more of a dropping valuation?

 

Cruise stocks are probably over-sold (although they might drop a bit further before rebounding). Markets always over-react, both down and up. Once the dust settles in the Ukraine, whether that's in a few weeks or months, cruise stocks will rebound; the pent-up demand for travel remains. (That said, I'm not sure I'm ready to put money on the table to buy cruise company shares; trying to time the market too often backfires!)

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We don't know what we don't know and I just read a report on Threadreader by a former Russian Foreign Minister that makes me think Putin does not know what he does not know.  The Russian argues that Putin was ill-informed about his military's condition even though much money had been spent on it, but, the corruption in the country led to much of that money being used to buy yachts for those who could, he never accepted Ukraine was a country, and he has misjudged the West's responses and apparently accepts the thought proposed by some that President Biden is mentally incompetent.  The gentleman proposes that Putin is not "off his rocker" and would not really consider using nuclear weapons, regardless of his bluster.  

 

My thought:  the Market and the valuations for cruise stocks--as well as others--are in for a very bumpy ride until--if--Putin decides for a different course of action.  

 

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17 minutes ago, TrulyBlonde said:

Today was a bloodbath. Inflation, fuel prices, war, what a mess we are in. Average Joe will not have the extra vacation funds for a cruise 😞

 

Indeed, but then again cruising is not a necessity for life.  

I wonder how many people cruising are Average Joe? 

 

9 minutes ago, rkacruiser said:

 

My thought:  the Market and the valuations for cruise stocks--as well as others--are in for a very bumpy ride until--if--Putin decides for a different course of action.  

 

It's already a bumpy ride 🙂. While I'm too lazy to run the numbers, I feel that CCL is almost valued for the metal in its ships after two disasters in 2 years. 

 

I don't believe this situation will go on for many months. Even if the morale was high and there were big successes, the Russians can't keep such a huge country occupied. One way or the other there will be a conclusion. 

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2 minutes ago, AmazedByCruising said:

 

Indeed, but then again cruising is not a necessity for life.  

I wonder how many people cruising are Average Joe? 

 

 

 

I think the RCL, Carnival, NCL, are your average type cruiser. Actually, this will impact all areas of travel because as you stated, not a necessity for life. Food, Fuel, etc. will impact any extra $ they have, especially those with young families to support. Very sad times.

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6 hours ago, TLCOhio said:

and the busts will be bustier.

this prediction caught my eye

 

1 hour ago, TrulyBlonde said:

Today was a bloodbath

Appreciate this warning not to log into my brokerage account tonight.

 

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1 hour ago, TrulyBlonde said:

Actually, this will impact all areas of travel because as you stated, not a necessity for life. Food, Fuel, etc. will impact any extra $ they have, especially those with young families to support.

 

Such an impact ought to be felt by many.  But, I remain amazed that there are many who take vacations/cruises and pay for them on an installment plan.  What will the thinking of those folks be when they decide "I want a vacation/cruise regardless of what"?

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1 hour ago, QueSeraSera said:

this prediction caught my eye

 

Appreciate this warning not to log into my brokerage account tonight.

 

I responded after I looked at it LOL!  I was a former stockbroker in my younger days. Yikes!

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1 hour ago, rkacruiser said:

 

Such an impact ought to be felt by many.  But, I remain amazed that there are many who take vacations/cruises and pay for them on an installment plan.  What will the thinking of those folks be when they decide "I want a vacation/cruise regardless of what"?

True, but remember we are on a different cruise board and I assume many here are not into the installment plan category. Crazy times

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