by winston » Thu Jun 16, 2016 10:00 am
not vested
Consumer Stocks to Buy Now: Walt Disney Co (DIS)
Walt Disney Co (DIS) opens its newest amusement park in Shanghai, Thursday, after years of negotiations with the Communist government in China.
Eventually working a deal that means sharing profits with the Chinese government, the new park will be four-times the size of Disneyland. In return, DIS gains access to 330 million people living within a three-hour drive of the Shanghai Disney Resort.
The future revenue those consumers will generate from all its various products and services is virtually endless.
CEO Bob Iger has put his legacy at Disney on the line with the Shanghai resort, and while skeptics exist, the fact that he’s been able to stickhandle DIS to an annualized total return of 15.7% since he took the top job in October 2005 — the SPDR S&P 500 ETF Trust (SPY) earned 7.2% in the same period — tells me he’s earned the right to make these big decisions for shareholders.
What you get with DIS compared to other media conglomerates is a bunch of working parts that act as a team. The movies support the resorts, which support the products and retail stores, which support the cable and broadcasting.
They’re all united under the Disney umbrella. It’s diversification that works.
And it’s exactly what Sumner Redstone wished he had with CBS Corporation (CBS) and Viacom, Inc. (VIA, VIAB). Unfortunately, family bickering and poor decisions have scuttled any opportunity of duplicating Disney’s level of success. As much as I respect the job Les Moonves has done at CBS, it isn’t half as good as Iger’s work at DIS. That’s not a slight against Moonves; it’s a compliment to Iger.
The future of Disney is in good hands thanks to his leadership.
Source: Investor Place
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