Which economic indicator do you use to make your investing decisions? If you have spare cash, is this a good time to put it in the stock market, now that the market is down about 10%?
I like to look at cruise bookings to see if people are spending discretionary income on vacations. I am assuming that if people are spending money on vacations, they have confidence in the economy, and don’t have plans to withdraw money from stocks.
It’s now September, and traditionally it’s a time that cruise lines give big discounts on cruising. Summer vacations are over, hurricane season is upon us, and no one is fleeing cold weather. It’s also a time for glorious trips to Europe in shoulder season. Prices should be way down. Huge discounts should abound. Let’s look at the vacationstogo.com 90-day ticker to see what discounts are offered in September. Here is the listing of Bahamas cruises that are discounted for September.
We see some very nice prices on Norwegian and Carnival; however, it has come to my attention that a lot of people don’t want to cruise these lines. They have the preconception that they aren’t as good as other cruises. I don’t agree with this perception, but the bias is there. I will use my son, whom I will dub PlayerPort, as an example.
Playerport wants to go to Nassau to play blackjack and poker at the Atlantis resort. He asked me to help him book an award ticket there. I convinced him to take a Bahamas cruise, because he could play a full day at Atlantis as well as several days in the ship’s casino. He would also probably spend less money on the cruise as compared to a Bahamas land vacation. He is in his 20s, and he told me he definitely didn’t want Carnival or Norwegian, as he and his friends consider them not upscale enough. He asked about Royal Caribbean.
Royal Caribbean cruises are not in the 90-day ticker because there is not a large discount on them. I could find RCCL September cruises using the advanced search, but I’ve decided to use images pulled from the RCCL website because I can convey more detailed information from them. Here is one itinerary that was appealing to PlayerPort and his cruising friends.
The price of $380 dollars doesn’t sound too horrible, but then again this is what I just paid a few weeks ago for a 7-day Med cruise. The bold print doesn’t include taxes and fees. Let’s look at the rock-bottom price on the cheapest inside cabin.
The cheapest fare is for an inside guarantee, which means you don’t get a cabin assignment when you book. You are guaranteed to get AT LEAST a room in Category Q, but you may be upgraded to a better cabin. Of course PlayerPort wanted to gamble on getting an upgrade (although I cautioned him that this was not likely as it appears that the ship will sail full.) He assured me that he and his friends will be too busy carousing the ship to spend much time in the room anyway. Here is the final cost for two in an inside guarantee cabin.
The bottom line is that he would be paying almost $1000 for the cheapest inside cabin on a short Caribbean itinerary in low season. By my estimation this is not a cheap cruise. This means that a lot of people are buying cruises even in “low” season. They have plenty of discretionary income. My indicator says that as long as people are paying top dollar for mainstream cruises, the economy will stay afloat (pun intended.)
This post is written somewhat tongue-in-cheek. I do not make my investing decisions based on nebulous indicators and neither should you. The fact that the stock market is down about 10% is probably the best buy indicator. It’s not a bad time to add to positions if you have some spare cash lying around.