Some contend that shorting stocks is un-American. Hardly. Selling short provides liquidity to the markets, aids in price discovery, and provides an extra check -- some argue the only check -- against ill-conceived business ideas and incompetent executives. New York Stock Trader Dave Fischer is a short king, and has made most of his money over the past 15 years shorting stocks. His favorite phrase is, "With those fundamentals, that stock can't hang on for long."
Short these shares if you can tolerate high-risk and are an experienced investor that does not remove Buy/Stop Losses.
Each is a major cruise line that's battling domestic and international macroeconomic headwinds, overcapacity, stagnant-to-lower U.S. disposable income for many U.S. employment segments, and the sector's latest concern: the H1N1 virus that has discouraged some from taking vacations in large-gathering, contained surroundings.
Note: It should be underscored that the H1N1 virus has not been spotted on ships operated/owned by these companies, but a portion of the public will nevertheless still bypass taking a cruise, at least for the next quarter or two, possibly longer, and that represents another business model obstacle that supports the Sell rating.
Carnival Corp (NYSE: CCL). Cover Short on a bounce off $20 or $15. Buy/Stop Loss if you were to sell shares in this company: $32.
Royal Caribbean Cruises (NYSE: RCL). Cover Short on a bounce off $10 or $5. Buy/Stop Loss if you were to sell shares in this company: $21.
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Disclosure: Lazzaro has no positions in stocks, but does own shares in two Pimco Bond Funds: PHDAX and PYMAX.
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