Cruise Lines Sailing Ahead
Right at the beginning of the COVID pandemic, I began to keep my eye on a few cruise lines. Why? Because my partner and I took a nice cruise on a Norwegian Cruise Line the year before COVID and had a blast. The cruise line was packed, filled with people enjoying themselves and spending a lot of money.
Our thought was (and always remains), let's pick up a cruise line for cheap when everyone is scared. In principle, we follow the fear and greed mantra which is, "be fearful when other people are greedy but be greedy when other people are fearful."
If you can internalize THAT saying, sit on your hands, and then strike when at the right time, you will make money.
That's what we did, we sat on our hands for nearly two years of the COVID pandemic and watched the markets flail around. Then we went long RCL on 03/04/22 at $70.00 a share, sat on our hands, and watched it sink like a rock to below $40 a share.
Wait a second, what was this mantra I just spouted above? Sit on my hands? Buy when people are fearful? We timed this buy badly in hindsight but when we went long we figured that the bad COVID pandemic had worked its way through the cruise lines finances, except it didn't. We were in for a few more quarters of bad earnings and RCL started to sink further.
As someone that day traded for a short stint, I knew that sometimes you had to cut your losses FAST instead of riding a stock down to its grave. With RCL, we had no idea how far it could fall. I wanted to long abandon the ship, especially after my 8% loss rule of thumb from the CAN SLIM Method of Making Money, but my partner analyzed the finances and said we should hold, so we held.
Now, RCL is hitting new highs, not all-time highs mind you, but it's in a strong trend higher on both the daily and weekly charts. It could've gone horribly wrong for us and we were lucky in this case.
Now, after "steaming ahead" and out of the lows, I'm looking at adding a trailing stop. Something that gives me a wide enough percentage to keep a position in it but tight enough to lock my profits in.
That's the problem for people like me, figuring out when to sell if I'm a long-term investor. Ideally, I want to hold forever and I might just consider that BUT my main concerns going forward are climate change and how will these massive fuel-guzzling ships handle spewing greenhouse gases in the air while we joyride through the Caribbean.
I've added in NCLH (my partner owns a bit of it) and CCL charts your consideration as well.
Disclosure: Long RCL and NCLH