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We had RCCL stock but when we divested out of the market in October 2019 (hallelujah !!!!!) we got rid of everything. We never tried to use it to get any OBC b/c by the time they loosened the rules for getting OBC we were already out of the market - or pretty close to that time.

Have we been tempted to get back in ?  NOPE.  We are as happy as 2 clams to be seeing our "safe" investments increasing every day rather than going down, down, down.  We both still have a little "funny money" in the market but it's less than 2% of my portfolio so I don't really care what happens there.  Trust me when I say...that the best decision I ever made in my entire life was to get out of the stock market last year.  Dan and I calculate that we would have lost more than a million dollars together if we had stayed.  Will it come back ?  Yes, I'm sure it will but I haven't got that kind of time !!  This is all the retirement money I will ever have.  If I had lost close to 30% (or more) of it in these past few weeks I would be devastated financially.  No cruise stocks for me !!!!

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Buying stock of a company particularly affected by a crisis while that crisis is still on-going and even in an upswing...does not seem like a wise decision to me unless you have the money to blow and feel like gambling.  Buying stock in a company because you like it much more than the average person is also not wise in my view (insert diversified portfolio lecture here).  

Just don’t want financial novices to see this thread and think this is normal investing behaviour or want to jump on the bandwagon to feel like part of the crowd. 

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Coronavirus is plaguing the stock markets, pushing Royal Caribbean Cruise, American Airlines and Occidental Petroleum close to bankruptcy. Royal Caribbean Cruise has already lost 54% of its value over the last year. Hopefully, the feds are working on a bailout before it's too late.

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OK, first off, while I work in the financial industry I am not a licensed broker or financial advisor! I'm just an IT guy who happens to have learned a decent amount about investing from my dad and my own experiences buying a handful of stocks over the last 20 years.

Secondly, @SpeedNoodles and @Lovetocruise2002, get ready to go beyond Bailey mode. 🥴

That said...

If you are serious about investing in Royal, understand that to hit that 100 share minimum for shareholder benefits you're still going to be spending about $2,200 at the current price of $22.03. That's definitely a lot better than the $11,300+ it was just a few short weeks ago, but that's still not pocket change. If getting the shareholder benefit is your only reason for buying, maybe reconsider because you'll have to take a LOT of cruises that actually pay you that benefit before you break even.

If you want to buy it because you love the company and think it's a good investment for the long term -- I'm talking at least 5 or even 10 years here, since that's always my minimum goal -- you'll want to read up on the company's financials and get some basic understanding of what's really going on under the hood. I just took a quick look at their annual SEC filing (called the 10-K, which was just published in February and covers through 12/31/19), and looked at their financials in particular (page 37 of the linked doc).

For me, I like that for the last 3 years at least they have had three times as much in assets (cash, investments, physical capital like the ships, etc.) vs liabilities (loans, credit lines, bonds issued, etc.). That tells me they are properly managing their finances, and the debt they have is being used to help expand the business and invest in ships / private islands / etc., rather than prop up their business or make it look better than it seems. That said, in comparison to Apple (the only individual stock I currently own), that's a lot of debt relative to assets; Apple for the longest time had zero long-term debt and almost no short-term debt; it's only in the last few years that they started issuing bonds and other debt instruments, and those are still a much smaller fraction of the total assets (which include a cash hoard that is just bananas).

The rest of the financial numbers looked good, too, although one thing surprised me -- It's been mentioned here a few times that the ticket bookings are basically break-even, and it's the on-board spending that drives actual profit. So I was really surprised to see that cruise fares are 75% of their income, while on-board spend is 25%. I would have expected the latter to be more like 35 or 40% if that's really the profit-driver. So I want to dig into that more and see if they break down how much profit comes off of each.

For me, this quick glance makes me think I might sell off some of my Apple stock (I bought it in 2000) and get a few hundred shares of Royal. But I want to dig deeper. I like their product from all three cruise lines, their leadership seems solid from what I've read over the last couple years, and the financials look good at a glance, but I still don't know RCL the company that well yet. Mistakes like the $18/night DBP "intern goof" and others that we've talked about here seem to happen with some disturbing regularity, and point to some possible issues that might make investing in them riskier than it already is, given the industry.

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1 minute ago, Lovetocruise2002 said:

And this is where I checked out...🥴😆

Back to checking prices...

Honestly that’s when I checked in. @JLMoran is speaking in-depth financial discussions and he makes a lot of sense. I am still monitoring but will stay on the sidelines and wait it out or look for stabilization. 

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definitely buying once this hits bottom (which i think is when they start sailing again). It'll take a couple years to get back near $100 so don't put any cash in it you cant live without. 

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33 minutes ago, Tim B. said:

Honestly that’s when I checked in. @JLMoran is speaking in-depth financial discussions and he makes a lot of sense. I am still monitoring but will stay on the sidelines and wait it out or look for stabilization. 

I was just kidding. There’s a long time running joke here that @JLMoran has a way with words.  No doubt that he has good insight. 
 

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1 hour ago, JLMoran said:

OK, first off, while I work in the financial industry I am not a licensed broker or financial advisor! I'm just an IT guy who happens to have learned a decent amount about investing from my dad and my own experiences buying a handful of stocks over the last 20 years.

Secondly, @SpeedNoodles and @Lovetocruise2002, get ready to go beyond Bailey mode. 🥴

That said...

If you are serious about investing in Royal, understand that to hit that 100 share minimum for shareholder benefits you're still going to be spending about $2,200 at the current price of $22.03. That's definitely a lot better than the $11,300+ it was just a few short weeks ago, but that's still not pocket change. If getting the shareholder benefit is your only reason for buying, maybe reconsider because you'll have to take a LOT of cruises that actually pay you that benefit before you break even.

If you want to buy it because you love the company and think it's a good investment for the long term -- I'm talking at least 5 or even 10 years here, since that's always my minimum goal -- you'll want to read up on the company's financials and get some basic understanding of what's really going on under the hood. I just took a quick look at their annual SEC filing (called the 10-K, which was just published in February and covers through 12/31/19), and looked at their financials in particular (page 37 of the linked doc).

For me, I like that for the last 3 years at least they have had three times as much in assets (cash, investments, physical capital like the ships, etc.) vs liabilities (loans, credit lines, bonds issued, etc.). That tells me they are properly managing their finances, and the debt they have is being used to help expand the business and invest in ships / private islands / etc., rather than prop up their business or make it look better than it seems. That said, in comparison to Apple (the only individual stock I currently own), that's a lot of debt relative to assets; Apple for the longest time had zero long-term debt and almost no short-term debt; it's only in the last few years that they started issuing bonds and other debt instruments, and those are still a much smaller fraction of the total assets (which include a cash hoard that is just bananas).

The rest of the financial numbers looked good, too, although one thing surprised me -- It's been mentioned here a few times that the ticket bookings are basically break-even, and it's the on-board spending that drives actual profit. So I was really surprised to see that cruise fares are 75% of their income, while on-board spend is 25%. I would have expected the latter to be more like 35 or 40% if that's really the profit-driver. So I want to dig into that more and see if they break down how much profit comes off of each.

For me, this quick glance makes me think I might sell off some of my Apple stock (I bought it in 2000) and get a few hundred shares of Royal. But I want to dig deeper. I like their product from all three cruise lines, their leadership seems solid from what I've read over the last couple years, and the financials look good at a glance, but I still don't know RCL the company that well yet. Mistakes like the $18/night DBP "intern goof" and others that we've talked about here seem to happen with some disturbing regularity, and point to some possible issues that might make investing in them riskier than it already is, given the industry.

Good information.   I’m trying to time the bottom like a lot here are.  This will be my first time purchasing individual stocks, except for employer company stocks.   I have been researching for a couple weeks now.  But I think it’s the time to get my feet wet. 

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7 minutes ago, Hutcherl said:

I’m trying to time the bottom like a lot here are.

Forgot to say this earlier. Don't try to time the bottom. You really can't, and as @loki007 said, it's going to take time to go back up anyway. IF you truly believe the price is going to keep going down for a bit, and you definitely want to buy the stock, then after setting up your brokerage account you can enter what's called a Limit Order, which is a standard type of stock order that every brokerage site offers.

Normally when you buy a stock, you're doing what's called a Market order -- buying it immediately at whatever the current price is. When you do a Limit order, you're changing it to say, "Don't actually buy this until the price is at or below the price I've specified." Normally, that just lasts for the day; if the price doesn't hit your mark then the order is canceled.

But you can also specify to keep the order in place until you cancel it (that is, mark it as "Good until Canceled"). That adds the rule, "If the price doesn't hit my mark today, keep this order open until it does hit my price, or I tell you to give up".

This combo is commonly used when the price is going down steadily; just pick a price (X) that you're comfortable buying it at, and don't worry about if it's going to be the bottom or not. If you think $15 is a good price to buy, make that your Limit Price and be ready for it never to reach that. If you won't buy for a penny over $10, set that to the price and take your chances on that level. As soon as the price reaches or goes below that level, the buy takes place.

Keep in mind that the price never changes by just a penny at a time, although most days the price doesn't change by more than a few cents at once. It could be $15.07 and then in the next second drop to $15.03, then back up $15.05, then down to $14.99. So if you set $15 as your threshold you might get it for exactly $15, but more likely it'll be for something like $14.97.

 

Market fun fact side note: There's another order type called a Stop order that's often used to make sure your investment doesn't go through a particular floor without automatically selling. It's like the opposite of a Limit order, in that you say "I want to sell X number of shares when the price is at or below $Y". Those can also be kept active until canceled, and a lot of investors use those to protect themselves from a sudden drop in the market.

I'm guessing that there's some portion of RCL investors that read the tea leaves about this pandemic and put in a lot of Stop orders to auto-sell their RCL when it dropped below marker values like $100, $80, $60, etc. In a free-falling market like this one, those Stop orders trigger so fast and sell off so much at once that they actually can make the situation worse for a time, artificially dropping the price like a rock depending on how many of those orders got triggered all at once.

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18 minutes ago, JLMoran said:

I'm guessing that there's some portion of RCL investors that read the tea leaves about this pandemic and put in a lot of Stop orders to auto-sell their RCL when it dropped below marker values like $100, $80, $60, etc. In a free-falling market like this one, those Stop orders trigger so fast and sell off so much at once that they actually can make the situation worse for a time, artificially dropping the price like a rock depending on how many of those orders got triggered all at once.

I'm a big believer that this greatly exacerbates the stock market decline in the hard hit sectors.  Investors often do this when they see something they know will impact a certain segment of the market.  Here it's a lot of travel companies that are taking a bit hit.  This increases the trading volume (flow) of a company and other investors that are paying attention to those trends will also jump in and sell.  It lessens the demand for the stock even more and lowers the price.

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JLMoran has a lot of great info here! I think we will know more when the boats start sailing again and the planes are packed! You might not buy at the bottom but you should be looking good 5 years later. Like it was mentioned steadily investing in Growth Stock Mutual funds is a safer investment over the long term. I only bought stock in RCL because I believe in the company, and its future outlook. I believe it will see more of it's profit from onboard sales and all the upcharges at CoCo Cay with the new areas they just opened up.

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35 minutes ago, Rene Desmarais said:

market analyst thoughts on RCL,     not good for RCL?

What did RCL do to get this ?

 

https://finance.yahoo.com/news/cruise-line-analyst-jumps-ship-164252724.html

Financial analysts IMO never look at the long term, only the immediate term out to maybe 6 months. Which is not what they should be doing as a group whose job is supposed to be providing long-term guidance, but guess what? They get fees from subscribers, those subscribers are mainly hedge funds, and the only thing a hedge fund manager cares about is what’s happening tomorrow. And who’s gonna pay good money for someone talking about what’s expected 5 years from now?!?!? 😜

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I asked my broker to get me trading volume (yes, I have a broker instead of trading online), and its at or below the monthly average...it may be near bottom...I think the scenario where it goes lower is if resumption of sailings is delayed further.

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1 hour ago, chrisb732 said:

https://www.royalcaribbeanblog.com/2019/06/26/all-about-the-royal-caribbean-shareholder-discount

this is what you get for your 100 shares

  • $250 Onboard Credit per Stateroom on Sailings of 14 or more nights.
  • $100 Onboard Credit per Stateroom on Sailings of 6 to 13 nights.
  • $50 Onboard Credit per Stateroom on Sailings of 5 nights or less

And how do they know you own stock?

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9 hours ago, Lovetocruise2002 said:

Hahaha!  That was like me too!  In the end, I figured that I would just stick to watching prices lol.

OMG, I thought I might be the only one.  I Googled how to purchase stocks and then closed my browser too!

I have a hard enough time trying not to look at my mutual funds each day.  They have dwindled to beyond recognition in just three weeks 😩  I have to stop checking!

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