My wife is extremely familiar with all aspects of Disney operations. What's hurting them right now is the massive loss of ad revenue. Disney is inextricably tied to sports right now.

Don't get me wrong, parks are extremely important, but those have much higher operating costs.

This post was edited by thundercock on Mar 30 2020 02:51pm

They own ESPN right? Another really good point.

They currently are trading at 16x earnings which isn't terribly expensive but if we think we are heading for a recession i think 10-12x is a better multiple.

This post was edited by ofthevoid on Mar 30 2020 02:54pm

They have ESPN, ABC, and FOX. The entire entertainment/media landscape has been decimated.

Ad revenue is becoming a lower proportion of most channel's revenue because people aren't watching TV as much. That/s not going to change even after the pandemic is over, but thankfully Disney have quite a few revenue streams.

What would worry me is their level of debt that skyrocketed in the last year. Presumably it included a lot of R&D and capex on Disney plus. They'll have to borrow even more now their parks are closed.

Sold my spy puts for a profit

For anyone listening/reading my opinions this is a call that i have pretty strong conviction about.

A recession at this point is inevitable. You have to think about what government tools are there to ward off recessions and kick start economies. Our interest rates are essentially zero, money machine going brrr isn't going to create jobs because most companies wont want to invest when they think the economic outlook is negative in the future. Monetary policy has been pretty much exhausted so we have to think about fiscal strategies. So what's left?

What did we do in the 30s, what did China do in the last 20 years? You spend on infrastructure. This is actually kind of the perfect storm that will force both parties to the table. Everyone knows that infrastructure spending has been a topic floated around by both parties, but Washington dysfunction prevented this from happening for the last 3-4 years. I think a 2 trillion dollar infrastructure bill is on the horizon, and i could see this passing by end of summer. So with that in mind, you have to think who are the potential beneficiaries (from sales perspective)? Personally i think some commodity are primed for a very strong bounce back. This is kind of a contrarian play since there has been so much demand destruction, but this might be a really good time to buy certain metals & other construction materials primed for price upticks if this infrastructure bill is passed.

I really like copper here after it got whacked tbh. Copper is also a key electronics component which will see continual demand growth. I bought FCX at 6.30 and some long calls. Citi gave them a price target of 10 recently even with corona ravaging everything in the markets. You have to look for risk-reward asymmetry. At this point some commodities are looking extremely attractive.

These are good points I might copy you , may I am why fcx in particular and how long calls are you going ?

I am up quite a bit on the puts I opened couple days ago also. I’m holding for another 2 weeks minimum unless spy hits 2100 which I will then sell

So glad i got my dad to pull all of his stock investments out around 26k and jump over to bonds. yeah he missed out a bit on the push to 30k, but he's set now.

Ya my dad is 80/20 bond /stock , his paranoia will pay off for him now. He wanted to retire in 5 years but he can do it shorter now probably

i could smell a recession coming, but would never have bet it would be 2020 or had any idea what would cause it. just started to get that paranoid feeling like something was coming. tinderbox waiting on a spark.

I was so wrong. I said this market would continue to balloon into trumps re election, causing massive victory for trump and further market increases. All the while corporate debt bubble is reaching all time highs which was my prediction last April /May that it would be this bubble that would spark the next correction. I was way wrong about time frame, but lack of corporate liquidity is certainly going to play a role still