Another Carnival Cruises crash?

It certainly was this morning, but not in the same vein as the Costa Concordia disaster in the Mediterranean at the start of 2012.  No, this morning the shares started 15.5% down on yesterday - and when I see that kind of share performance, I start to get excited!

Why, you ask?  You already hold CCL shares from the last time the company crashed something - how can a big drop be good?  Well, first things first - Carnival hasn't dropped as far as it did last time and it's been happily paying dividends since then.  It remains a solid long term company too - it's the biggest in a market which has huge barriers to entry (can anyone lend me the cash to buy a cruise liner?  I didn't think so), it's attractive to the oldies - and there are plenty of those in the world - and more importantly there will be loads more in the developing world who want to take advantage of the self-contained hell that is a cruise.  I cannot imagine anything worse.

The financial fundamentals are important in a business this size, so let's have a quick look at what reassured me once the markets were open this morning. Firstly, bookings grow - but in order to make this happen, ticket prices are down.  The earnings guidance is down by between 9% and 31% - so probably down 20%.  Sounds bad, but I do not think this is a position that will sustain - as I said above, this is a service for old people and there will be lots more of rich ones of those in future unless we all go Logan's Run - not a particularly attractive concept for a 31 year old!

I was thinking to pick up something distressed in Europe about now, particularly in Italy which totally stinks at the moment (wife said no to Greece :-(), but I am also getting twitchy about 12 year highs in the London markets.  Although, that said, if you consider all the money the Government has printed then actually the markets could go a lot higher - purely on the basis that so much money is washing around the system.  I digress.

The other company I am really interested in getting involved with is Jardine Matheson - an old family business with lots of interesting exposure over South East Asia.  Probably good until a war kicks off over the South China Sea!