Disney Is Crushing It
My daughter got home yesterday from her first semester at Tulane. She's a sophomore transfer from a school out in the Baltimore suburbs. It was kind of a commuter school — most students don't live on campus. So it was maybe a little boring.
I suspect maybe she felt insecure about making a big, far-away move right out of high school. And this school was far enough from home that her mom wouldn't be doing the pop-in. Still, it was the wrong move. She didn't have a great time like you're supposed to when you go off to college.
Seems like something clicked last year, and she made a bold move. To New Orleans. 1,125 miles away. Definitely no pop-ins happening.
I haven't seen her since I took her to the Big Easy in late August. She joined the Juggling Club (no actual juggling happens, they prefer to garden). She's apprenticing at the radio station and will have a radio show in the spring semester. She's been to a couple frat parties but says it's not her scene (phew).
So yeah, when I picked her up at the airport yesterday, I got a little weepy. My girl has blossomed. She is profoundly happy — you can see it in her every aspect.
Tomorrow, we will be driving to Richmond, Virginia, at 4 or 5 a.m. because that's the only time that there will be even the remotest possibility that I-95 isn't a parking lot. But it's really fine because my daughter is taking her life by the reins and she is happy. This Thanksgiving will be the best one ever.
There will be football. We will eat sauerbraten (we moved on from turkey years ago). And we will surely drink a "miss you" toast to my dad, with the last bottles of 1989 Dunn Howell Mountain Cabernet — his favorite.
And the kids (my brother's and those of a dear family friend) will probably start a new tradition — watching some classic movie on Disney+...
#1 Blue Chip
Okay, maybe that's a pretty weak tradition. But I can guarantee that ours won't be the only household watching Disney's new streaming service. The House of Mouse had 10 million subscribers on November 13, the day after it launched. And it is reportedly adding 1 million new subs a day...
Back in 2016, I wrote here in Wealth Daily that Disney was my #1 blue chip stock. It was trading around $94 a share at the time. It's busting over $150 today. Funny thing, I mentioned Microsoft in that article as an example of a blue chip. It was around $57 at the time. It, too, is breaking out over $150. Alas...
Still, if you ask me, I will tell you that buying Disney at $94 carried less risk than Microsoft at $57. Because the genius of Microsoft CEO Satya Nadella's moving Windows from a disk to a subscription cloud product was not yet recognized.
Back then (all three years ago), Disney probably traded with a P/E ratio that was twice Microsoft's — because Disney's genius hasn't been questioned in 50 years. A bird in hand...
Launching the Disney+ streaming service really isn't such a radical move for Disney. It's still entertainment. And if any company knows how to give people a good time, it's Disney. You ever hear anyone come back from Disneyland and say they had a bad time? Exactly.
I recommended the stock again in August 2018 in a nifty little piece titled “The Future of Streaming Is NOT Netflix.”
It was trading around $118 at the time.
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On a Clear Day...
It has seemed pretty clear to me that the subscriber growth estimates for Disney+ have been far too pessimistic since Disney announced the details on April 20, 2019. And if you know how Wall Street operates, then you must suspect the lowball was deliberate, to keep regular investors (you and me) from driving the price higher.
In fact — you guessed it — I shared my suspicions in a little piece titled “If You Can't Beat Disney, Join... the Yankees” earlier this year.
Launching a streaming service means Disney owns its future. It now owns the platform along with the content.
Content Is King, Long Live the King.
Now, I would like to wish you a very happy Thanksgiving holiday. If you are feeling even a tenth of the gratitude I am, you're gonna be just fine. Please be careful if you're driving.
I'll talk to you next week.
Until next time,
A 21-year veteran of the newsletter business, Briton Ryle is the editor of The Wealth Advisory income stock newsletter, with a focus on top-quality dividend growth stocks and REITs. Briton also manages the Real Income Trader advisory service, where his readers take regular cash payouts using a low-risk covered call option strategy. He also contributes a weekly column to the Wealth Daily e-letter. To learn more about Briton, click here.
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