On a Cruise Ship in a Storm, Anything but Smooth Sailing

Last week a New York Times reporter reported his experience from a Royal Caribbean cruise ship steaming from Bayonne, New Jersey to Cape Canaveral, Florida.  (full article)

 

It was around 5 p.m. on [SuperBowl] Sunday when I began contemplating whether or not I should start composing goodbye messages to the people I love, as well as one to the friend dog-sitting my golden retriever to ask her to find him a good home for me in the event I didn't live to see another day.

 Just a few minutes earlier, the ship's cruise director had made an announcement to the 4,000 or so passengers on board stating that "things are going O.K." and asked for everyone to "remain in your rooms and enjoy the complimentary movies."

 Things did not seem to be going "okay."

The "Anthem of the Seas" endured hurricane force winds of 150 MPH, waves of 30 feet, sustained much cosmetic damage to the ship's interior, and, more seriously, to one of two steering pods.  Fortunately, the ship's Wi-Fi never lost it signal, so passengers were able to "enjoy" the Super Bowl while clinging to their bunks.  The ship turned back to New Jersey the following morning rather than risk driving ahead into another storm.  (video)

Metaphorically speaking, our clients feel like those cruise ship passengers right now.  The weather wasn't great in 2015, and seems to be getting worse in 2016.  The S&P 500 declined 12.6% since last May, 8.5% since start of year, touching levels seen briefly in January 2016, August 2015, and is now back at the level of January 2014.  And yet, compared to 2008-9, these are only 10 foot waves (a decline of 12.6% versus a decline of 55%.)  Our "all-weather" portfolios survived the storm of 2008-9, and will survive this storm as well.

Read the entire commentary here.