Cruising for a bruising

QIs this a good or bad time to buy stock in cruise companies?

AIt might seem like it’s a great time to buy, as some cruise operators saw their shares sink by more than 70% from January to March, and those stocks are still struggling to recover. Market crashes do produce a lot of stock bargains, after all. But not every fallen stock is a bargain. Many are tied to companies facing difficult challenges, and you need to figure out whether the challenges are likely to be fleeting or lasting.

With a global pandemic raging, the idea of taking an ocean cruise in close quarters with thousands of people has less appeal than it used to. Once a vaccine has been found and the threat from the virus can be managed well, the travel industry overall should see business improve. But whether demand for cruises will return to previous levels is unknown. A longer pandemic may even lead to some cruise operators declaring bankruptcy and wiping out shareholders.

There’s simply plenty of uncertainty and risk right now — for the cruise industry and other industries. You may want to wait for that to abate, or just look for companies in which you have a lot of confidence. Q How do we know when we’re in a recession? — M.K., Elyria, Ohio

A There are different definitions of the term. One, for example, requires two consecutive quarters of declining gross domestic product (GDP), adjusted for inflation, before a recession can be declared. Another looks for several months of widespread, declining economic activity. An extreme, or protracted, recession is often referred to as a depression. will generally go up over the long run, but there can be bumps and occasional stagnation along the way. Before selling, you might have asked yourself how Disney could make money off the Star Wars franchise — via films, merchandise, theme park attractions and so on. If Disney’s overall future seemed bright, you should have hung on.