market folly

We're posting up notes from the Sohn Canada Investment Conference 2015 (Capitalize For Kids.)  Next up is Jacob Doft from Highline Capital.  He pitched going long the cruise lines, including Royal, Carnival, and Norwegian.

Jacob Doft's Capitalize For Kids Presentation

-    Long Cruise Lines including: Royal (RCL), Carnival (CCL), Norwegian (NCLH)
-    For 4 reasons:
o    Low End consumer – sentiment rising (Retailer CEO’s change tune on customers a.k.a. more optimism such as Walmart), oil prices falling and unemployment falling. Cruise ships offer travel for $200/day versus fly and hotel trips around $450/day.
o    China – government through the Ministry of transportation is endorsing cruise ship travel. Chinese can visit Japan, Korea and Taiwan via cruise ships. Port infrastructure is built and can accommodate 7 million people. Relaxed visa restrictions will drive future demand. Carnival and Royal have 9 ships in China. 2015 new ship capacity of 4,150 people.
o    Rest of world improvement – 4 ship builders build ~5 ships/year. 2010-2015, ½ average goes to China per year. 2015-2020, 3/5 ships will go to China. Cause demand outside of China for cruises and price appreciation.
o    Cuba: cruise ships already go around Cuba. Cruise ships are a good way for Americans to go to Cuba.
-    Projects approximately 50% upside from current prices.


Be sure to check out the rest of the presentations from the Capitalize For Kids Conference.