Saudi Arabia’s Sovereign Wealth Fund bought an 8% stake in Carnival Cruise Lines for about $190 million

Saudi Arabia’s Sovereign Wealth Fund bought an 8% stake in Carnival Cruise Lines for about $190 million

Brent Simpson

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Investing Education Academy
Leon Noble

In our weekly Facebook Live we discussed risk/reward. In March of 2020 Saudi Arabia’s Sovereign Wealth Fund bought an 8% stake in Carnival Cruise Lines for about $190 million. Also, a corporate director at Carnival bought $10 million worth of Carnivals stock. So why did both purchases happen now vs. 3 months ago? The answer….the risk is DRAMATICALLY less now in the stock then it was just 3 months ago. This fact was recognized by the Saudi’s, the corporate director and us at IEA.

One of our 2 stock picks this week was Norwegian Cruise Lines. The reason we picked Norwegian over Carnival was lightly covered on our FB Live but will be covered in detail in our FB group and members’ area. But one of the big reasons is there’s a much higher probability of a stock falling from, $50 to $11 then from $11 to $0. A stock falling to $0 means it’s out of business. The probability of the $37 billion cruise line industry going out of business is extremely low. With cruise line stocks down over 80%, their current risk/reward is VERY favorable.

Which stock do you prefer? Norwegian or Carnival? Do you feel cruise line stocks are a good investment right now? Let us know in the comments below.

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