Fee’s too high. Seriously. Also Cramer is unequally wrong about things. Mostly he just pumps blue chip bullshit without any critical thinking whatsoever. He’s just a sell side clown. There are more egregious examples than him if you go looking for them.
They’re like sports betting touts.
Yup. Occasionally Cramer’s recommendations sure seem to help hedge funds in general exit positions.
Yeah that’s been a theory of mine for a while, I think we’ve both discussed it. Like to have as many ass backwards predictions as he’s had and not get canned… I think he’s like the Bag Passer in Chief.
Just the biggest stock tout. Most stock promoters that aren’t pump and dump guys I feel really truly exist to gin up demand for positions people need to get out of.
Yes, yes, that’s all well and good, but is there a meme?
Yeah, i obviously enjoy talking this stuff too. My point was that i dont believe that dividend payouts allow for any reasonable upside potential.
We both mentioned and agreed that facebook was a very good buy at 100 and i stated that i felt you were going to crush it when you bought it. But one thing i rememebered in that thread was the intense vitriol for Facebook and the opinion that their stoxk was going to crater from there. The one thing that i really changed my opinion on since covid is that public perception plays a larger role in a stock’s valuation when you’re dealing with some many more investors - but again that leads to potentially overvaluing.
In simple terms, it feels like the “return to normal” segment of the popular bubble graph so it may not be the case that the market both undervalued Meta (disregarding the legal/AI accomplishments theve had since then) but that theyve regained some of the confidence that pushed prices back up. I dont think the high market caps are unaffected by that
I’ll separate this out because it was maybe the most important point in there. The AI accomplishments were pretty strongly foreshadowed in earnings calls and annual reports. I know the hypothesis is that the market efficiently digests that info, but I just don’t buy it. I think some of the people who are supposed to be doing that are spending more time than they’d want anyone to know during the work day at Peter Luger’s or doing lines of coke, and I think others are probably stretched thinner than they should be and aren’t spending several hours in a row reading a company’s financials. And I don’t think AI is there yet, either.
What are everyone’s thoughts on Disney at current prices?
At $80 it’s back to 2014 levels basically. Profits have been shit since the pandemic, which makes PE ratio look like not a bargain at all (but it would be a good ratio based on 2018 or 2019 income). I think the value of their content and their brand is as strong as ever. They dropped their turd of a CEO and brought back Iger who led the company for like 15 successful years. Overall consumer weakness as people start maxing out debt could be a headwind over the next few years, at the same time the current price creates some potential a mega corp like Apple or Berkshire buys the whole company.
It is never easy to predict a bottom and I always seem to call these things too early, but I think Disney is as likely to still be on top of their industry in 50 years as almost any other blue chip company and today’s price might be something to look back on in decade as a great entry point (unless we have another mega recession in the near future and the whole market drops).
I’m not someone who advocates others buying individual stocks, but I bought some yesterday in my fun money account
I’ll let CW take this one he already did the research to talk to someone else lol. What I’ll say is that while I don’t agree with buying Disney at these levels or in this situation you are framing your thinking correctly. Disney has fallen on hard times and that very definitely is one of the major causes of stocks ending up where they need to end up for me to buy them.
If Disney was just a movie studio with theme parks, what is it worth? That’s the value I would place on it. The streaming business is just plain awful. Just license the content.
Right now the theme parks division is the only profitable division. Extraordinarily profitable, it’s floating the rest of the company.
My kids call it “Disney Minus.” Just give up on streaming.
why? I really like it. It’s better than their IP spread across 6+ streaming sites.
Like, honestly, people are really short sighted with disney’s streaming strategy. They also invested heavily in hulu, and try to sell d+ as an addon to a lot of other services. This is directly in competition with traditional cable so they fight it hard. But as an end user, disney’s model is actually much better and cheaper and easier to use.
I know revenue wise it hasn’t paid off yet, but i don’t think it was a bad decision when it was made nor for the future. They have always been a very forward looking company.
My kids love it but guess it’s age related. My son is probably one worlds most prolific watchers of Rescue Rangers show (1989)
my 4 year old self probably could challenge him on that. Great show. When disney+ came out at first, you couldnt easily find that shit
there’s [also a rescue rangers video game for NES that was very good for children of that era]Chip 'n Dale Rescue Rangers (video game) - Wikipedia).
great game
From a Benjamin Graham style value standpoint it looks terrible, 0/10 on my screener. I was thinking about trying to look at it and break it down by division to see what the company may end up being worth, but basically you’re trying to figure out:
A) What is ESPN going to sell for? (Or what’s their cut of profits worth if they partner up with someone else on production/distribution.) The old model where ESPN was a cash cow because everyone with cable had to pay for it is coming to an end.
B) What is the movie/streaming business actually worth? This comes down to how many movies get made the old way (and the strike is a big risk factor, too) versus what is Disney+ actually worth? Last I checked, they were still losing money on Disney+. That may have been a few quarters ago, but if they’re making a profit there it’s marginal. The big question IMO is whether they can actually stream stuff efficiently enough with advanced enough algorithms to really compete and win in that space. They do have some good IP here, which is worth something.
C) What is the parks business worth?
D) What is the merchandise/licensing business worth?
Then you can add those numbers up and you’ve probably got a ballpark estimate. My five minute wild ass guess aiming to come in conservatively is something like $100B for parks (I’d say $120B less their debt and I’m just making a wild ass ballpark guess at how much of their debt is in the parks side), $10B for ESPN, $10B for Disney+, and I wouldn’t buy a movie studio business right now so I’m going with $0 but obviously the market would value it at billions of dollars too - I just think that strike is a huge risk for the studios (@boredsocial made some good points to me in a recent convo).
So $120B seems like a number at which it’s worth spending more time looking at DIS. Currently trading at $150B.
I was aiming low and didn’t spend much time, so $150B could be a very reasonable value, but it’s probably not a bargain.
You could make an argument that it’s fine, but I’m guessing they’re not doing nearly as good of a job as other streaming platforms at minimizing costs and maximizing efficiency.
I’d argue that there is more value to their content split up because the people who would pay for Star Wars stuff are pretty different than the people who would pay for princess movies, plus if they bail on the streaming side and just license it, it’s a lot closer to their old model that they had success in and they have a lot of content that could be tentpolecontent for streaming platforms.
Difficult for me to see the movie studio business as a zero or anywhere close to it because I think people will still be watching Star Wars, Marvel, Pixar, and the animated classics in 10, 20, 30 years regardless of the strike. In the long term, generative AI may be able to support movie production in ways that really increase the leverage the big studios have over unions and star actors but that’s really speculative and not part of any valuation.