The axiomatic phrase often used on Wall Street is "rising tides lift all boats."
It refers to stock sectors where if one stock gets good news, most of the stocks in the sector will rise along with it. The other side of that is also true, and today in the Port of Tampa, cruise ships were sitting in the port for the second day, and angry cruise ship passengers were waiting to get off, or angry that they may not get on.
Cruise ship stocks have had great fourth quarter results in 2014, and every analyst seemed to predict that the horses were out of the barn for the sector and nothing but increasing revenues were on the horizon. Enter mother nature and some untimely Port of Tampa fog to reverse any goodwill. It always amazes me how fragile sector trends can be, and how the herd mentality can turn on a dime. I'm not sure the rest of the market will see the effects of Tampa fog, but I know that in the age of social media, there will be so many unhappy Facebook Inc. (FB) posts, fog instagram's and tweets that it will have an effect on the consumer. Make no mistake about it, the passengers will blame the ship, not mother nature. I've seen New Yorkers demand their money back from Jamaican Hotel chains when it rained for five days in Ocho Rio.
The Wealthy vs. the Wannabe Wealthy
Carnival Cruise Lines (CCL) and Royal Caribbean Cruises (RCL) are big companies at $33B and $16B respectively, and the percentage of passengers boarding in Tampa Florida is a small number, but it harkens back to the fragile nature and pulse of the fickle consumer. This sector is one to watch, because similar to luxury stocks like Coach (COH) , the Cruise ship business is hyper fickle. Profits in this group depend on the wannabe wealthy versus the actual wealthy consumer.
The wealthy consumer is always going to buy Coach products, and will always take the entire family on cruises, but the middle income US Consumer will head out on a booze cruise for a weekend getaway during winter months. If they don't get their perceived money's worth, they'll tweet their ever-loving asses off like their is returning burnt toast at a local cafe!
So expect Facebook posts showing fog, burnt toast and angry tweets as we exit the snowy season in the Northern US, but more importantly, expect lower pricing in vulnerable sectors.
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