YouSaid · the spoken record

David Trainer

lines on the record: 22
first: 2020-01-12
most recent: 2020-01-12
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“My pleasure, I had a great time, Stig. It's always fun to talk about this stuff, and I appreciate you guys giving us the opportunity.”
2020-01-12 · We Study Billionaires · TIP277: Intrinsic Value Assessment of Disney - w/ David Trainer (Business Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, sure, new constructs.com dea-syndicated on Forbes, Barrons on a regular basis, Wall Street Journal, etc. And really, you know, what new constructs is about is democratizing access to the truth behind the numbers. We make this available to all investors through partnerships that we have with firms like TD Ameritrade and Interactive Brokers. So we're giving the world the ability to effectively have their cake and eat it too. That is operate with a really high level of diligence without having to read cover to cover these 250-page plus annual reports. And the thing I need to make sure I am clear about is that the research you get from Wall Street and a lot of other places is not based on the entire annual report.”
2020-01-12 · We Study Billionaires · TIP277: Intrinsic Value Assessment of Disney - w/ David Trainer (Business Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Of really how much of a misinformation machine can go into the business of selling stock, we really like to rally around this reverse DCF because of its empirical, mathematical, and objective nature. Yeah, I think 200 bucks and the expectations for future cash flows to get to that number are very, very reasonable for Disney. And so, yeah, I think 200 bucks and beyond is what we'd say in terms of target price.”
2020-01-12 · We Study Billionaires · TIP277: Intrinsic Value Assessment of Disney - w/ David Trainer (Business Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Profits are going to grow at the rate of about 10% for seven years is what stock price of around $148 a share. So if you believe that Disney can do better than 10% profit growth seven years, right, think that their moat is wider than seven years, then you've got upside. I don't think it's unfair to say that Disney could probably grow profits for at least another 10 or 20 years if we're talking about 20 years of profit growth, that Disney's still going to be able to grow profits. They do 6% on average for 20 years, $200 stock price. And there's a good chance they do better than that, given the history of profit. is stronger than 6%. So I think the market tends to not arrive at the right price and just stay. Pendulum tends to swing a little too high and a little too low at times. That's what gives investors advantage. But that's the way we would think about valuation for Disney. Having lifted the tech bubble and seeing, being on the front line,”
2020-01-12 · We Study Billionaires · TIP277: Intrinsic Value Assessment of Disney - w/ David Trainer (Business Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“All this comes back to the premise, the underlying principle that stock is equal to the present value of the future cash flows that will be generated to the owner of that stock. So there's a stream of cash flows baked into that stock price. What our modeling approach does systematically consistently without bias objectively is just look at those numbers. What are the future cash flows have to be to justify the price for a given stock? And that's what's led us to be bearish on some companies and bullish on others. Because when the expectations baked into something like Netflix's stock price or for 20% compounded annual growth in profits for over 20 years, you know, you've got to shake your head and say, well, that's a steep bet. And given the fact they've never really made any money, I don't know if I want to make a bet like that, right? On the other hand, where we've seen really consistent profit growth over its lifetime, and we look at $148 a share, basically that's saying that the market's implying that Disney”
2020-01-12 · We Study Billionaires · TIP277: Intrinsic Value Assessment of Disney - w/ David Trainer (Business Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“And we saw a little bit of it, as we saw a little bit of a dip with Lucasfilm. And so that part of it's cyclical, but I think one of the things Disney's doing pretty well, especially this year, is with the movies and the lineup that they've had. I mean, every other month we're getting another great Disney movie. And I don't think that they expect that to fall off. I think theme parks do better in the summer. So you've got some cyclicality there. But, you know, in terms of sort of big cycles like you see with energy and other sort of raw material commodity companies, I don't really put Disney in that category. And again, as I mentioned early on, Stig, I think they've got a better track record for consistently creating high-quality original content than the few companies in the history of the world.”
2020-01-12 · We Study Billionaires · TIP277: Intrinsic Value Assessment of Disney - w/ David Trainer (Business Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Really see Disney as too cyclical. I think entertainment is kind of year round. I think the cycles you could potentially point to if you wanted to be cyclical would be sort of the big content acquisitions like Lucasfilm and now Fox. And I think in terms of cash flow, it's cyclical in the sense that when you make a $70 plus billion dollar acquisition as they did with Fox, you're going to see a dip.”
2020-01-12 · We Study Billionaires · TIP277: Intrinsic Value Assessment of Disney - w/ David Trainer (Business Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“I think if they see a setback in any of their movies that don't do as well as affected, anytime you've got a stock that's had a good run, you're going to attract a lot of short-term money. That money's fickle. And I think if you see something like that, you buy on the dip because look, a lot of investing is about taking advantage of the less rigorous investor. And so if you see fickle investors pushing the stock down, jump in, take advantage. But I'm really not very good at predicting short-term outcomes. I think we like to focus more on kind of long-term and the idea of getting rich slowly, I think, is just something you can hang your hat on and put your head on your pillow at night with a little more comfort.”
2020-01-12 · We Study Billionaires · TIP277: Intrinsic Value Assessment of Disney - w/ David Trainer (Business Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“They're very, very careful that they don't disclose something that hasn't been approved by their compliance department and is not also disclosed to everybody else. So you're not going to get any real nuggets. And so that's the big picture stuff. Also, in the same vein that I say return on invested capital for the overall company is important. Someone's return on invested capital by segment.”
2020-01-12 · We Study Billionaires · TIP277: Intrinsic Value Assessment of Disney - w/ David Trainer (Business Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“A press release or on a website. I think in general I'm going to go to my soapbox here and say press releases in general are not helpful. Conference calls are not helpful. These are effectively commercials for selling stock. This is coming from someone who has been on Wall Street and been in this business for over 20 years. I was at Credit Suisse before, during and after the tech bubble. Credit Suisse was the number one tech underwriting IPO firm during the tech bubble. And I saw transformation in Wall Street during that time. Then we had Reg FD, which happened in the year 2000. And Reg FD was this new rule where it was no longer legal for companies to call up their buddies on Wall Street and say, oh, by the way, we're going to beat the quarter by nickel tomorrow. And the Wall Street buddy take that information out to all their money management clients and say, oh, by the way, you should load up on company XYZ because they're going to beat the number by a nickel. Believe it or not, that was legal for a long time. That's not legal anymore. And what that means.”
2020-01-12 · We Study Billionaires · TIP277: Intrinsic Value Assessment of Disney - w/ David Trainer (Business Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“And so I think investors always want to pay attention to the content library. And we saw a big boost to that in the Fox acquisition. And we're seeing what Disney is doing with Star Wars. It's like more Star Wars content that we had in the prior 20 years combined. I mean, you had to wait three years for every new Star Wars movie. And then we didn't have anything new for a long time. Now we've got series. We've got more movies coming out. I mean, people are lining up for that stuff, right? And it's across so many age groups. So again, I think that's a smart move and that's a great example of how good they've been at monetizing that. I think you want to always pay attention to businesses by segment. You want to look at the relationship between how much cash flow the business generates relative to how much capital has gone into it. That's a metric you want to look at. And you want to make sure you look at that metric with integrity. So it's important to do that analysis with real rigor, not just trust what you see.”
2020-01-12 · We Study Billionaires · TIP277: Intrinsic Value Assessment of Disney - w/ David Trainer (Business Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“About it like this too, Stick You're spending $140 for this great experience. And so Disney's doing pretty well on that part of the exchange. How much of a better customer might your niece be of Disney products in the future?”
2020-01-12 · We Study Billionaires · TIP277: Intrinsic Value Assessment of Disney - w/ David Trainer (Business Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“That's a great question. And by the way, look, one of the things that affects about Disney is that in many ways they define the entertainment experience in some ways, right? Like just, you know, whether it's Michael Jordan when he wins the national championship with the Bulls saying, I'm going to Disneyland. Disney's a special thing. And they're charging $140 per person for breakfast because people are willing to pay it, right? I'm sure that price would have come down if they were getting zero takers. I bet you it probably sells out, right? And really that's speaking to some intelligence, I think, on Disney's part around appearances that you'll take with you for years or maybe a lifetime, right? I'm sure the reason you're thinking about it, Stig is because you know your nieces are going to like, they're going to love it. And they'll talk about it and they'll be thrilled. They'll be thrilled about it for days in advance. That's one of the things that makes the moat strong around Disney is their intelligence around how to monetize the content.”
2020-01-12 · We Study Billionaires · TIP277: Intrinsic Value Assessment of Disney - w/ David Trainer (Business Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Bad business, right? So they found a way to make money in amusement parks, and there's very few. I mean, I've never seen anything at six flags where they're really tying into the themes like Star Wars and Frozen and all of sort of the Disney characters at Disneyland, like Snow Riot, et cetera. The tie-ins that Disney does across all these merchandising, you know, like, for example, no one buys Comcast merchandise 21st century Fox merchandise or Viacom. I mean, you just think about these big film giants, really. And it's a Disney's ability to really compete and integrate across those four segments we've been talking about makes them so special.”
2020-01-12 · We Study Billionaires · TIP277: Intrinsic Value Assessment of Disney - w/ David Trainer (Business Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“I think they take on a lot of people. One of the reasons that they are a successful is that they are able to integrate these different segments really, really well, and therefore find synergies in these disparate segments where their competitors cannot, right? So when we're talking about the key segments, right, as you mentioned before, media networks, parks experiences and products, those generate about the same amount of revenue, 25 and 26 billion studio entertainment is at 11 billion. Direct to consumers at 9.35. And there's not really many firms or any firms that compete across all of those, right? So when you look up Disney competitors, you're going to see mostly big media companies, Viacom, Time Warner, 201st Century, Comcast, and none of those guys have anywhere close to the kind of brand that Disney has. Any amusement parks, right? And amusement parks is typically a”
2020-01-12 · We Study Billionaires · TIP277: Intrinsic Value Assessment of Disney - w/ David Trainer (Business Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Original content, they've got licensed content, and I think they've got some new stuff they're looking to develop. And they're spending an enormous amounts of money on that new content. So much, that just comes back really to the point about where Disney's advantages lie. And it's that, hey, they can create this great content and they can monetize it. And they just do it really well. I mean, how many box office records did they break this year with these other movies, whether it's superheroes or frozen? way of touching people's hearts and minds. And they've done it for so long. It's really remarkable.”
2020-01-12 · We Study Billionaires · TIP277: Intrinsic Value Assessment of Disney - w/ David Trainer (Business Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“I think three of the top five shows on Netflix, and that means number one and number two. I think number one, two, and five, that's licensed content. That was stuff that Netflix had to buy from somebody else. I think it was like the office and friends. And so it's like, okay, what? They're just a reseller of content.”
2020-01-12 · We Study Billionaires · TIP277: Intrinsic Value Assessment of Disney - w/ David Trainer (Business Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“really good at grading high quality content and they're really good at monetizing it. Disney Plus is just another channel. It's another funnel for them to bring people into the Disney family and start selling them on parks and merchandise. And so, you know, I don't really care so much about the near-term profitability of Disney Plus. I mean, it's going to be better than where Netflix. Netflix is burning through billions, and they don't have these other channels to support the business and make money. They've never been able to really monetize the content. All that aside, I think Disney Plus is probably not going to be a hugely profitable company because I think it's more just about bringing in more customers. And so we're going to see the ripple effect of Disney Plus across all the businesses, merchandising, parks and recreation. And because you're going to get more people coming in, more people going to movies, more people go into parks, more people buy merchandise because guess what? Disney is just now using Disney Plus as a way to bring them closer to the talk.”
2020-01-12 · We Study Billionaires · TIP277: Intrinsic Value Assessment of Disney - w/ David Trainer (Business Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Disney Plus is probably going to be not that profitable for them for a while, but I guess it's going to be a whole lot less unprofitable than Netflix. That'd be right because Disney can support this new channel. Think about it. Disney Plus is just a new for a business that already has a core of amazing content. I want to say amazing. There are a few companies in the history of the world who have been able to generate original content profitably over a consistent amount of time like Disney. I mean, how many others can you name? So that's the core asset, right? And you're in the business. You're looking to generate high quality original content. It's not an easy thing to do, especially to be good enough to be monetized across millions of people, right? And what is Disney going to do this year? Nothing short of make more money, what, $10 billion, the first ever $10 billion in revenue from movies company of all time. So they're really...”
2020-01-12 · We Study Billionaires · TIP277: Intrinsic Value Assessment of Disney - w/ David Trainer (Business Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“But none of that content matters. If they're not smart about how to monetize that versus some of their competitors, Disney just has the upper hand because they have so many multiple channels, whether it's merchandising, whether it's parks, whether it's direct to consumer, whether it's movie studios. I mean, they're able to make money from the content just better than everyone else.”
2020-01-12 · We Study Billionaires · TIP277: Intrinsic Value Assessment of Disney - w/ David Trainer (Business Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“What are they adding? Like 10 million people in the first day and a million people a day or something like that to that channel. I mean, it's a slam dunk for them. And I don't think it's going to, you're going to see a little bit of a dip there. On the movies and studios, depending on how they allocate the Fox acquisition, we're definitely going to see a dip there in profitability because that was like $70 billion. That's a debt of profitability in a short term for sure, but track record here for Disney in terms of earning an adequate return on their investment is just really good. Over the years, you can see acquisition, acquisition, acquisition, and returns on capital take a little bit of a dip, but they come right back. And so in no small part due to the fact that executives get paid for earning returns on invested capital, we found that returns on capital have always been steady. Rare thing these days. And that's part of what sets Disney apart is a really high return on capital business. In addition to a lot of intellectual property around all that great content.”
2020-01-12 · We Study Billionaires · TIP277: Intrinsic Value Assessment of Disney - w/ David Trainer (Business Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Disney's different divisions in terms of profitability have really been consistent. You know, the parks have been less consistent because they have at times not done so well and because they're really capital intensive. And so it takes a lot to build an amusement park. And so I think there's probably going to be a little bit less in the direct consumer segment as well now because they're investing in Disney Plus. I don't think the capital intensity there is that big. I think a lot of people miss how natural a transition it is for Disney to offer content online. Let's face it, streaming content online is not that hard. YouTube's been around for a long time. You don't need a PhD to create a YouTube channel and Disney already has this huge library, this shelf of content that they can just repurpose through another channel. And I think people sometimes think that's going to be a really hard thing. And I think that what we've seen since the launch of Disney+.”
2020-01-12 · We Study Billionaires · TIP277: Intrinsic Value Assessment of Disney - w/ David Trainer (Business Podcast) · IDENTIFIED FROM THE TRANSCRIPT