View Single Post
  #12 (permalink)  
Old February 27th, 2008, 08:16 PM
Rev22:17 Rev22:17 is offline
Senior Member
Join Date: May 2003
Location: Massachusetts
Posts: 4,770


Originally Posted by You
One thing that I might add to Norm's well written dissertation on buying RCL stock is that I can't think of any poorer reason to buy RCL stock than to maybe get a $100 on board credit for a cruise. I am not a big stock holder in RCl, as Norm said he was, and in fact I do not own any cruise lines stocks.
One obviously should evaluate the stock as an investment, just as one would with any other investment.

That said, the amount of the credit depends on the length of the cruise. I have been averaging about $450/year in shipboard credit since I typically take a cruise of ten or eleven nights and a cruise of fourteen nights. At the current stock price, that represents an annual return of about 12% on an investment of the minimum of 100 shares to qualify for the credit -- and it's in addition to the company's quarterly dividend (currently $0.15 per share per quarter, or $60 per year on 100 shares, which is about average for "blue chip" stocks) and likely appreciation.

Originally Posted by You
My opinion, which has the exact amount of twenty-twenty hindsight as Norm's has, would be that given the poor economic climate here in the US and world wide, coupled with rising fuel prices and world wide terrorist threats, would make buying stock in any cruise line not very appealing to me. If tough times should come, and I sure hope they don't, common sense says that cruising would be the first thing that people would take out of their budget and thus cruise stock prices would fall.
Historically, cruise lines have done very well in times of economic difficulty because cruises are a lot less expensive than vacations at most resorts ashore. It seems that people who decide that they can't afford to go to Disney World are likely to take a cruise instead. I took several in 2002 and 2003, in the wake of the "9/11" attack, and every one of them was sold out.

Reply With Quote