Another Carnival Disaster

by Pa Rock
Citizen Journalist

I knew when I heard the news yesterday that Belize was denying entry to a cruise ship because someone who had been exposed to Ebola was on-board, the ship would undoubtedly belong to Carnival Cruise Lines - and it did!

A few years ago I managed to save up a few extra dollars (a feat that cannot be accomplished while farming) and determined to make a stock purchase.  I had studied the market and had my eye on two stocks in particular:  Harley Davidson (HOG) and Carnival Cruise Lines (CCL).  Some of my friends owned Harley’s, and just about everyone I knew took an occasional cruise – myself included. 

I had only made a couple of stock purchases in the past, but I had been extremely fortunate on those picks – all which were made by looking at stock histories, seeing how the companies were performing out in the real world, and following my gut.

My gut in this case was pushing for Harley, but I made the unfortunate decision to seek the advice of my stockbroker – and she leaned strongly toward Carnival.    I took her advice – just in time to witness in horror as the Costa Concordia, a cruise ship owned by a company that was owned by Carnival, hit a reef off of the coast of Italy and partially sank killing thirty-two people.   

The sinking of that ship ultimately resulted in Carnival stock sinking as well.  When a stock takes a sudden drop in value, there are a few options.  First, the stockholder can sell and get the hell away from that unlucky purchase – but selling confirms the loss and does away with any chance of ever getting the investment back.  The money is gone.  The second option is to stand pat and hope that the stock will eventually rebound.  The stocks of large, well-known corporations often do rebound.  A third option is to double-down while the price is low and buy more. 

After watching the stock price remain low for several months – throughout the summer and up until the fall and winter cruising season – I decided to take the third option and buy more Carnival stock at the lower price so I could see a return on my investment when the price finally began rising. 

No sooner was the ink dry on the agreement to purchase than disaster struck that cruise line again.   This time it was an engine fire aboard the Triumph that resulted in a loss of power throughout most of the ship and caused the vessel to struggle crossing the Caribbean for five days until finally reaching the port at Mobile, Alabama.   Bathrooms backed up, people became ill, emergency supplies had to be flown in daily by helicopter – and passengers called relatives and the press to offer constant updates regarding the hell that they were experiencing aboard the vessel.

And CCL stock prices dropped again.  But I had learned my lesson and stood pat – choosing neither to sell nor to purchase additional stock.

Now, of course, there is another Carnival Cruise Lines disaster taking place.  The Magic, with four thousand or so once-happy tourists aboard, was denied entry into ports in Belize and Mexico after it was learned that one of the healthcare workers who had been exposed to the Ebola patient in Dallas was on board the vessel.  Carnival did quarantine the worker on board the ship, but that precaution was not enough to convince other countries to take the risk of exposing their populations to a flood of passengers – anyone of whom could conceivably be a carrier.  

Four thousand passengers, it would seem, got little more than a long boat ride for their money.

As an interesting aside, Carnival’s very first cruise ship, the TSS Mardi Gras, ran aground on its maiden voyage in 1972.  Obviously my research on this company was seriously flawed!

If and when the price of Carnival Cruise Lines stock ever rises to the point where I can break even – I will be selling my shares.

It’s a carnival all right – one that could have been put together by Stephen King!