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Think Recession Hurt Cruise Lines? Think Again

If you think the recession is hurting the cruise vacation industry, think again, says Joe Terranova of Vitrus Investment Partners because the cruise lines continue to make money.

"The fundamental thinking is they cannot continue to grow earnings," says Terranova. "But you are seeing these earnings in the cruise lines have resiliency just like you're seeing them in the airlines and it plays to the opposite theory that we're entering a double-dip recession."

Terranova learned this the hard way when he was repeatedly burned by shorting Carnival throughout the first quarter. While speaking on Wednesday's Fast Money, Carnival's rival Royal Caribbean Cruises' CEO Adam Goldstein has a positive outlook for 2010. He says the company's projections are inline and maybe even better.

At the same time, Goldstein says customers are paying more for better amenities. Brian Kelly of Kanundrum Capital says that's a sign that those with disposable income are going to spend it.

Watch the videoto see the full interview with Goldstein.

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Trader disclosure: On July 28, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Finerman owns (AAPL); Finerman owns (BAC); Finerman’s firm owns (BAC); Finerman owns (CVS); Finerman’s firm owns (CVS); Finerman owns (FLS); Finerman’s firm owns (FLS); Finerman’s firm owns (GLW); Finerman owns (JPM); Finerman’s firm owns (JPM); Finerman’s firm owns (RIMM); Finerman’s firm owns (SKS); Kelly owns (BP) puts; Jon Najarian owns (GLD) puts; Jon Najarian owns (AAPL) call spreads; Jon Najarian owns (MSFT) and short calls; Jon Najarian owns (COP) and short calls; Jon Najarian owns (RRC) and short calls; Jon Najarian owns (MSFT) and short calls; Jon Najarian owns (SYMC) and short calls; Jon Najarian owns (RIMM) and short calls; Jon Najarian owns (IACI) and short calls; Jon Najarian owns (LVS) and short calls; Jon Najarian owns (MGM) and short calls; Jon Najarian owns (XOM) and short calls; Jon Najarian owns (MOS) and short calls; Cortes owns (RSX), (GS), (MS); Cortes is short the S&P 500; Cortes is short the Yen; Cortes is short US Treasuries; Terranova owns (AMZN), (EMC), (CREE), (BRCM), (LRCX), (COP), (AXP), (BMO), (CSX), (PEP), (CVS), (GS), (PCP), (C), (APA), (FCX), (JOYG), (MMM), (MOS), (UAUA), (WYNN), (GOOG), (BBY), (SU), (KOL), (XBI), (SWN), (BAX), (JNPR); Terranova is short (GLD)

For Brian Kelly
Accounts managed by Kanundrum Capital own (ELX)
Accounts managed by Kanundrum Capital own (ORI)
Accounts managed by Kanundrum Capital own (VIV)
Accounts managed by Kanundrum Capital own (BAK)
Accounts managed by Kanundrum Capital own (AAPL) calls
Accounts managed by Kanundrum Capital own (UNG)
Accounts managed by Kanundrum Capital are short (GLD)
Accounts managed by Kanundrum Capital are short (RKH)

For Joe Terranova
Terranova works for (VRTS)
Terranova is chief market strategist of Virtus Investment Partners, LTD.
Virtus Investment Partners owns more than 1% of (CASS)
Virtus Investment Partners owns more than 1% of (LDR)
Virtus Investment Partners owns more than 1% of (LPHI)
Virtus Investment Partners owns more than 1% of (MGRC)
Virtus Investment Partners owns more than 1% of (XLB)
Virtus Investment Partners owns more than 1% of (XLP)
Virtus Investment Partners owns more than 1% of (XLY)
Virtus Investment Partners owns more than 1% of (XLI)
Virtus Investment Partners owns more than 1% of (XLK)
Virtus Investment Partners owns more than 1% of (XLU)
Virtus Investment Partners owns more than 1% of (SUBK)
Virtus Investment Partners owns more than 1% of (WDFC)
Virtus Investment Partners owns more than 1% of (YDNT)
Virtus Investment Partners owns more than 1% of (DRYS)

For Dennis Gartman
Funds managed by Gartman own (SJT)
Funds managed by Gartman own (FAX)
Funds managed by Gartman own (BPT)

Tavis McCourt
***No Disclosures***

David Levy
***No Disclosures***

Mike Khouw
***No Disclosures***

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