Summary
- Common sense investing in an uncommon time.
- Don't attempt to market time the unknowable. Disney's long-term brand is unaffected.
- Why Disney is a very compelling investment opportunity.
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Investment Thesis
Disney (DIS) is at the center of the current uncertainty. Yet, nothing is fundamentally impaired with its operations. I believe that the downside here is now largely capped. And although the upside varies, it holds a very strong promise ahead.
I believe Disney is a compelling, high-quality business that is cheap enough to be a rewarding investment opportunity. Here's why:
(Source)
Background to the Idea
The one aspect about Disney that most can agree on is that it's going to be rough here for a while. But aside from that single perception, nobody actually knows anything about its near-term prospects.
All kinds of hypotheses are coming out from investors about how consumers will be changing their travel behavior, reducing their passion for sports, all the way ranging to everything going back to normal quickly on pent-up consumer demand and then, everything in between.
I lay no claim to knowing the answer to anything about Disney's near-term prospects.
What I do know a little about is investor behavior. For now, there are a plethora of question marks. There's a lot of fear and uncertainty. Things are going to continue to get worse before they get better.
But investors should think broader. I strongly believe that when earnings come out over the next several quarters, and people see that its financials are bad, they will be able to at least start to quantify how bad things actually are and can start to value it better and move on. That's why I'm bullish on Disney. Look at its business:
