1. You are an analyst for Aikens Investment Co. Your boss, the Portfolio Manager, is always searching for the next solid investment opportunity. She approaches you and says, "I think the current economic malaise will end within the next nine months. I don't expect a robust rapid recovery but rather a healthy stable growth rate of GDP of 3% and consumer discretionary spending of 3.5% to 4% for the next several years.
Please review Carnival Cruise Lines (CCL) and Royal Caribbean (RCL). Please think of both in terms of both risk and reward. We have $100MM to invest of our $4B fund. Please recommend which allocation you think is appropriate, i.e. 50/50 to each name, or 100% to one and 0 to the other etc) and why.