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Example of Rally Ignorance

I posted the following as a comment to an SA article about how the cruise lines do not have to worry about the recent ship disaster (Concordia).  I copied this to my blog because it underscores how naive the late stage 'investors', whether individual or fund, can twist their thinking to justify and rationalize their decision making on stockpicking.  It is the same process that the Elite always employ to warp drive the sheep into doing their bidding, whether it is to move the market up past reality or down past reality.



I second the view of the previous commenter that legal ramifications of plaintiffs could easily exceed insurance caps and threaten the financial solvency of Carnival Cruise Line.

I also believe this author and others are too sharply discounting the impact of this tragedy on the GROWTH rate of persons taking cruises over the next year or so, particularly among first time cruisers since I believe there is a significant familial and friend 'agreement' component when first timers propose the idea of a 'cruise' to friends and family; the naysayers have much ammunition with pictures of a beautiful new 2005 ship laying on its side in Italian waters

while it is a blessing many more people did not pass away, I am convinced you will see with the next market plunge a distinct and lasting aversion to CCL and RCL and "NCLH" may take another 3 years before Apollo retrys to float that offering, no pun intended

the principal source of GROWTH comes from aging North Americans and they need a comfort zone to take a multi thousand dollar 'voyage'; bad stock markets coupled with legitimate fear of "what if the boat sinks" can cause delays in decision making; ie "oh well honey, let's wait on this cruise thing"

CCL and RCL are leveraged about 20 to 1; ie they have 10 billion in debt to 500 million in cash and they have huge fixed costs including servicing the debt at even low interest rates

while I will not short them at their present low levels, I will not buy until I see CCL at 22 and RCL at 18, both of which would be real lows and I think quite possible to see by early-mid March on a panic selloff