In life you have to always be on the lookout for opportunities whether it is for a new job, dream house or good investment. The cruise ship wreck a couple of months ago presented one of those openings.
Costa Concordia is a ship from the Costa Cruise Lines which is owned by Carnival Corporation. They also own six other lines including Carnival, Princess, Holland America, Cunard, Seabourn and P&O.
We’ve experienced cruises on three of the lines and I have been bugging my husband to invest in the company so we can get the shareholder benefit of on-board credit each sailing. He always ignored me until the Costa Concordia disaster.
Generally anytime something bad happens to a company the stock is going to take a dip, if not a dive. BP stock plunged 52% within 50 days after the Deepwater Horizon disaster. A share of Netflix stock sold for $300 and within five months had dropped to under $63 per share after a disastrous plan change. Even though the plan to separate streaming and disc rental programs was rescinded after 11 days, the damage was done.
Carnival Corp. also experienced a stock drop of 18% in two days; a drop of over $6 a share. That’s when we decided to buy for several reasons.
Reasons to Buy
Even though the Costa Concordia event would depress cruise bookings initially, cruise bookings were quite solid and on the increase. Carnival Corporation, as the largest in the business, was poised for success.
As shareholders we would get $50 to $250 to spend on the ship for each cruise we take on any of the lines. Since we’ve already taken 8 between the various brands, this would definitely be a benefit we’d use. We’ve already gotten $250 credit for our upcoming vacation.
Additionally, Carnival has historically paid a quarterly dividend. This is becoming more important as we look at increasing our passive income in preparation for retirement.
Already the stock has climbed nearly $4 since we bought it. This despite another Costa ship having problems, though nothing like what happened to the Concordia. We’re pleased with this stock transaction and will be on the lookout for other good companies that have bad things happen.
Have you taken advantage of a corporation’s problems to invest?