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The Return to Disney


Has Disney really improved operationally under new management?


Hello from New York where I'm bracing myself for a Return to the Heart of Walt Disney's Consumer Darkness (known to most as "a theme park vacation"). Long-time Minyans might recall that I've already reported from the heart of Disney, in a three-part series starting here. The differences this time are: 1) I'm going to Florida rather than California; 2) Disney (DIS) has changed CEOs and is rumored to have improved, operationally; 3) This time I'm taking both a 5-year-old girl and a 2-year-old boy and 4) I'm now a Disney shareholder.

The stakes are higher, the location has changed but, ultimately, this trip is a sequel to a first-run performance that had its moments but was ultimately frustrating. I've sent the family as an advance team and I'm leaving tonight after Fast Money. Of course, I'll keep you posted as to what I find and what can be inferred as an investment. In other notes:

  • Activision (ATVI) rocked estimates higher this morning. In a hard tape, all you can hope to do on the investment side is be long companies with the fundamentals intact. I feel pretty good about ATVI in that regard.

  • Consumer Confidence came in horrible but it's hard to call the results a shock. It is an oddity of the American consumer, and an indictment of the value of these surveys, that we cheer ourselves up by shopping. I don't expect Christmas to be great but I think we can safely say a certain amount of weakness is in the stocks at this point.

  • What am I most hopeful for in regards to changes in my Disney experience? I want to see execution. I want characters to be where they are supposed to be (Winnie the Pooh stood up my daughter in 2005). I expect the place to be overpriced. It's Disney. I just want to get what I'm paying for.

  • Quick take on Citigroup (C)? I still don't think either C or the XLF has bottomed. The Prince has been long Citi since $45. Citi buries "value hunters" as a matter of course; indeed, doing so is the only thing reliable about Citi for the last five years.

  • I'm not entirely crazy about Dick's (DKS) $40 mln acquisition of Chick's, given the mediocre performance of Golf Galaxy, but Dick's has earned the right to expand its business as it sees fit through its general operational excellence. Dick's is a great company operating in a tough environment. I'd sort of like to be long but that "tough environment" thing makes it tough to pull the trigger.
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Position in ATVI, DIS.

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