I visited Disney Land yesterday with Kaitlin and Tucker. We left Ryder home with the grandparents because he’s an absolute animal with no interest in staying still for more than three minutes.
It would have been a nightmare, and at just 1.5 years old, there’s no point in ruining the trip for everyone else.
Tucker was in heaven, his first time there. Kaitlin is a Disney fanatic. I was more taken aback by how expensive everything is rather than the “magic”.
I believe the last time Kaitlin and I visited Disney Land was for her 30th birthday some five years ago. That was actually quite a bit of fun, albeit exhausting. My perfect visit is about six hours. Kaitlin’s is literally all day. Then again the next. Rinse and repeat until forever.
Back then, we managed to hit every ride multiple times, leaning heavily on the FastPass implementation that allowed us to feel like we were gaming the system. It’s amazing how much more you can do without kids.
And as we stood in line for our first ride yesterday, Mr. Toad’s Wild Ride, I furiously downloaded apps in an attempt to locate the FastPass system.
Me: “What the heck, they want me to sign up. I don’t want to sign up!”
Kaitlin: “For what?”
Me: “The FastPasses! I just want to know where the stations are. Where are the stations?!”
Kaitlin: “I think they do that all online now. I don’t think there are stations.”
Me: “There have to be stations! I liked the stations!!”
Kaitlin: “We’re those old people, talking about stations when everything is on your phone now. You know that, right?”
Me: *seeing a nearby teen ripping my ‘stations’ soundbite, remixing it, and using the audio to make fun of me on TikTok*… “Shit.”
After I begrudgingly signed up, I learned Kaitlin was right. FastPass access was through the app… for $20 per ticket!
Five years ago it was free, at THE STATIONS! You ran up, grabbed a (wait for it) PAPER ticket from the dispenser in front of the ride you wanted the FastPass for with a printed time for when you could return. You could do something like one per hour. It was glorious.
That same luxury today costs you $20 per person. Yeah… no.
Most people think this is Disney flexing their power, that they raise prices because they can. But Disney raises prices because they must.
They must satisfy shareholder demand by pushing revenue ever higher. That means pushing prices increasingly higher and monetizing everything (no free FastPasses). But it goes beyond that.
If Disney were to get too congested, fewer people would go. That hurts the bottom line. As I walked the park I realized there’s no place to grow. There’s no surrounding land to annex and expand capacity. As the ride wait times get ever longer, the natives get restless. Raising prices mitigates this to an acceptable level by throttling demand.
I don’t know if the FastPass was initially designed as a test for potential monetization or if it was simply an attempt to decrease wait times that Disney eventually had no choice to monetize. But if everyone’s using it, it losses its utility. And that can only be remedied by throttling demand (monetizing).
Increasing prices is both good and necessary for shareholders and Disney goers that are still willing to pay up the nose. We just don’t really see it that way when we’re shelling out $25 to drop our car and another $104 to step foot into the park.
$DIS could easily lose another 10% – 15% of its value and still be a constructive pullback from the previous multi-year consolidation:
There’s plenty of opportunity to do that with current CoVID-19 fears, but it’s a great buy IMO. I should know, I’ve been a shareholder since something like 1992 when my parents bought each of us kids something like 5 shares that have since split (multiple times) into 60. I still have the original stock certificates; they’re cool as hell.
Square crushed earnings yesterday after the bell and finished the day up 3.55%, flexing on a bloody general market. At one point $SQ was trading up over 11% but it was dragged down with the indices, so I’ll take it.
I wrote about $SQ the other week, noting that I would not be surprised if the stock moves up 50% – 100% in the coming 3 – 6 months as long as “earnings don’t throw a wrench in things”. They definitely didn’t, and here’s the updated chart:
All we’re really seeing right now is the stock consolidate above it’s break out zone. If we see any recovery or good news for the broader market, I believe we’ll see $SQ absolutely scream higher.
It’s starting to feel like the time to consider what can go right rather than what can/will go wrong. Three weeks ago was the time to think about what can go wrong in terms of CoVID-19. If you’re reacting to what’s going wrong now, you’re reacting too late IMO, and the risk for whiplash is high.
So what could go right?
We could start to see evidence of containment, a vaccine, really anything that would equate to less disruption to the global or domestic economy than what people are expecting now.
And don’t discount government intervention. While that may not be “right”, markets surely would view it as such. This Tweet caught my attention today:
If you haven’t already panicked, I think it’s a mistake to do so right now. Surely, plenty of tech companies believe things could go right no matter what.
Holed up in our homes, with no commutes, we’ll all be spending more of our attention furiously researching CoVID-19 (Google), staying in touch with friends (Facebook), binge watching more TV (Roku & Netflix), and avoiding unnecessary trips outdoors (Amazon & GrubHub). As time permits maybe we’ll get some work done (Slack and Zoom).
If I didn’t know better I might believe the above companies colluded to create CoVID-19.
