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  1. #31

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    Quote Originally Posted by Bacon
    I've played the "find quotes from Walt to support your side of the argument" game too many times.
    That is NOT what I said... What I said was Walt is not making the decision... And you can go down the road of WWWD if you wish.... But that point is moot as well is it not?

    What I am saying is sustainablity is the key here... has nothing with do with being "trendy" or "fresh" or "edgy." It has nothing to do with what "Walt would have done." But it is studying what Disney does very well, and keeping those tradtions alive and fresh... That is a blend of the two...

    It is a cyclical argument to make that suggestion in a debate "classic" verses "trendy." The truth is you need both... Which is why I don't buy the "trendy" argument that we should discard what is broken if it worked for over 50 years...

    Animation is a good example... You are about to see a flood of CGA... and there will be no distinction as to if it is Disney or not... Do the investors care? Heck ya, they do...

    Pardon the pun, but... You can feed yourself today, Bacon. Or you can make sure you have your munchings and crunchings tomorrow... Feeding yourself tomorrow is why most people make investments... Feeding yourself today is why most people work for a living...
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  2. #32

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    Quote Originally Posted by cellarhound
    That isn't true of all investment bankers... A good example is Warren Buffet, the second richest man in the world...
    A rare bird there.... Few investors today are interested in sustainable growth. Heck, most mutual funds have had to switch from yearly re-evaluations of their holdings, to monthly, and now weekly and daily.


    Quote Originally Posted by cellarhound
    (That is a pretty profound statement from a guy who most investment bankers turn to for advice...)
    Grandma's and widdows give their money to Warren Buffet to invest.... everyone else is taking it to the Roulette table on tech stocks, med stocks, IPO's, money markets. They're all chasing the next Apple or Microsoft so they can become millionaires and retire in 10 years.

    Personally, I think DIS is still overvalued with a P/E of 25. Of course, the market in general is running about that level.

    One of the major flaws of capitalism is that there is no was to guarantee that the amount of money available for investment will match the amount of reasonable investment oppertunities. In the 70s/80s, high interest rates pulled money into bonds and there was too little money for stocks (average P/E fell to 10 from historical average of 25). In the 90s, interest rates fell and too much money flowed into stocks (average P/E went to 40).

    Buffet, one of the few long-term investors stayed away from these over-invlated "new economy" stocks, and as a result pulled 8-10% gains in years others will pulling 30-40% gains.

    Well, as soon as these "new economy" companies started going bankrupt, becuase profits not revenue growth makes a company solvent, the bubble burst.....

    But interest rates haven't gone up... in fact, they went down further..... as a result, there is NO WHERE to put your money that is a "good investment". Interest rates are barely matching inflation, and the stock market is still runnig a PE about 66% above the historic average(25 vs. 15).

    Buffet is looking for companies with a P/E near 15, or ones that he thinks can grow their profits to drop their P/E to 15. DIS is neither. Their P/E is 25, and they've not shown an ability to significantly increase revenues in a long time.

    Almost everyone except Buffet is still searching for the next bubble.... What stock is going to shoot from a P/E of 25 to a P/E of 80? (Assuming they'll be the ones that get to dump in when it is 7 times reasonable value and not be the one that gets to take the ride to the cellar.)

    Sad really. May as well take your retirement to Vegas and plunk it down on the Roulette Wheel.


    ...... and in this market, Bush is actually proposing we redirect money form Social Security (which goes directly into bonds to keep interest rates low) and allow them to put it into the stock market, pumping even more money into an already over-valued market.... Pigs to the slaughter..... Insane.

    Wow, that went off track.

  3. #33

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    Quote Originally Posted by cellarhound
    Feeding yourself tomorrow is why most people make investments...
    But that expect 10-15% annual growth from their mutual funds.

    Every quarter I get an email showing the rate of return of the various mutual funds in our 401K plan.... You would not beleive the number of co-workers that change their deductions every quarter to the fund that did the best the prior quarter... Wow, these stocks went up, (so now they are propabably overpriced) therefore will probably go up again (making them even more overpriced), but I'll be one of the few that get out before the fall......

    Feeding yourself tomorrow SHOULD be what people are investing for. 20% of your income to savings for 45 years, with a 6-7% annual rate of growth (3-4% above inflation), and at 63 you should have enough money to sustain you for 20 years of retirement... or until the first time you get a major medical condition.

    Too many people, myself included, wake up at 40 and realize, not only are they 20 years late getting started saving, but they're actually still in reverse..... going further into the red instead of further into the black. Heck, the only way I have a chance of retiring is if I can get 15% Rate of Return......

  4. #34

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    Quote Originally Posted by cellarhound
    Pardon the pun, but... You can feed yourself today, Bacon. Or you can make sure you have your munchings and crunchings tomorrow... Feeding yourself tomorrow is why most people make investments... Feeding yourself today is why most people work for a living...
    I never disagreed, however what is sustainable changes. To be sustainable, there needs to be initial popularity. It's the legacy of Pirates and Mansion that keep them going as much as the quality. Parents impressing on their children how great it is because they remember how great it was to them. That's part of the forumula. It's not all of it, and instant popularity is no guarantee of sustainability. However, instant unpopularity almost certainly is a guarantee of unsustainability.

    What about the Tiki Room? For it's time, it was TOTALLY trendy. The Pollynesian thing was all the rage, as was that style of musical dinner show (the dinner part enver materialized, but that's what the kind of entertainment it was supposed to envoke). And yet, here it is, alive today and still going? Why? The legacy. Its legacy of innovation, and its legacy of something today's parents enjoyed as kids. It certainly isn't the technology itself, as by today's standards, the technology is laughable.

  5. #35

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    I mostly have to agree with dshimel. I think he has very valid points.

    What is more immersive than seeing a living, ideally interactive figure tell the story or act as a character? AA allow a good designer to create the most immersive elements possible.

    When Disney gave up being the developer of advanced AA, leaving the technology in the past instead of updating to the present, they lost a huge tool in immersion. They may not have cared at that point, but they also ended up running up their own costs.

    Had they continued to pursue AA development, and kept up with it, it would probably be even cheaper to maintain and upgrade than it is today, and that would have made huge savings in every park over the last 30 years. Sure it would have cost money, and the return may not initially have been as much, but they would have been able to recoup a lot by staying ahead. Killing invention was a huge error on Disney's part.

    I also agree that family rides, enjoyable to the widest range of visitors is a real ideal that has proven to work. Investing in AA can only improve the experiences we already enjoy, and make them last even longer.

    We're at a point now with AA and computers where a variety of script events could happen at random, or, given enough development and time, true scripted interactive events.

    Imagine riding pirates and having a nearby pirate turn, face your boat, look directly at you, and say something specific-
    "Ay' there yon wench, tha' child een yor arms be a mighty fine treasure."
    Or
    "…a Pirates Life for me. Ho there, ye look like ye could be me own brother. Why it is! Orville you rat, wat are ye doin' with these bloody tourists?"
    Or
    "Oh, lass, you do look like a beauty I wanted to buy a' the las' wench auction. Are ye gunna go up fer sale again soon?"
    Or
    Your kid waves to a pirate, and it decides to wave back! Or wink, or give a wicked grin!

    Or Animatronic ghosts in the mansion that follow specific cars with their eyes or…

    There's so many more possibilities. And even more in the years to come. Honda has Osimo, essentially a free walking robot… imagine having a ride with free walking animatronics… that's immersion.

    Why with todays technology is the circle chase scene still done with frozen mannequins on turntables?

    Disney could do better and draw even more crowds. Money is best made by spending. Every fan of Disney sees that clearly by comparing what happened in our beloved park over the last 5 years compared to before. Business Schools are now trying to teach sustainable company growth rather than the quick fixes of Harris and Pressler and Eisner.

  6. #36

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    Quote Originally Posted by dshimel

    Personally, I think DIS is still overvalued with a P/E of 25. Of course, the market in general is running about that level.

    That isn't all the problems right now with DIS stock.... I still think there is value in it because of there is growth potential in the stock...

    Now wether or not current managment can capitalize on the potential that I see is something else...

    The problem with current managment (ahem - Eisner) is that he creates creates his own worst compititon... Now no CEO in their right mind WANTS this to happen... But Eisner isn't Caesar... he neglects the credo "keep your friends close, but your enemies closer!"

    I wonder what DisCo would be like if Katsenberg was promoted to COO, instead of a kick in the rear?

    No, DIS is still in bad financial shape because he could not retain the Wienstiens who will set up a new art house movie studio in compitition with Mirimax... And you already have Lions Gate and New Line in this sector...

    It gives me no faith in Eisner's or Iger's abilty to manage funds... I don't see how they are going to explain to investors why the Wienstiens formed a competative studio... The last thing Eisner needs in the film industry is more compitition to raise the cost of films...

    This is absolute madness...

    But I digress...

    You need to have a delicate ballance of trend and tradition... The trend is for those who have adult ADD and like a disposable culture, and the tradition is for those who know that there is more to DL than just Churro Stands and Trading Pins...

    When the two merge you get fantastic timeless attractions... But one timeless attraction will not save the gate at DCA... and you can't be timeless if the only thing you want to do is sell them a trading pin with their time warn theme character when they get off the ride...

    But you can't depend on growing theme park Trends to save your butt...

    (I still can get over that Pooh dark ride... And they think it will attract more people in the long term than Singing Mounted Moose Heads? Somebody has been smoking something out of the Chief's peace pipe behind Tom Sawer Island... An it aint tobacco...)
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  7. #37

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    Quote Originally Posted by cellarhound
    (I still can get over that Pooh dark ride... And they think it will attract more people in the long term than Singing Mounted Moose Heads? Somebody has been smoking something out of the Chief's peace pipe behind Tom Sawer Island... An it aint tobacco...)
    Pooh wasn't built becuase they thought it would be a huge long-term draw.

    Pooh was built to do two things...

    1) Allow them to shut Country Bears. That AA filled attraction had a huge maintenance budget. Plywood and fiberglass don't have NEAR the maintenance budget of electro-mechanical AAs. Profits go up just by cutting costs.

    2) Allow them to convert the whole back end of Critter Country into a giant Pooh shop. In the U.S. Pooh sells more merchandise than Mickey... well not last year with Mickey's 75th bday, but in most years.


    In my mind this was the problem with everything Pressler and Harris did. They were penny wise but pound foolish. Switch out an old show with a "new" ride that is "just good enough" to save a couple million in maintenance and sells a couple million more in merchandise, instead of using the location to do something much better that will bring an extra million people to the park, spending $50 - $100 each.

  8. #38

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    Quote Originally Posted by dshimel
    In my mind this was the problem with everything Pressler and Harris did. They were penny wise but pound foolish. Switch out an old show with a "new" ride that is "just good enough" to save a couple million in maintenance and sells a couple million more in merchandise, instead of using the location to do something much better that will bring an extra million people to the park, spending $50 - $100 each.
    I'm sure they were told it WAS going to be a great ride. But overall, dshimel is on the right track. The "just good enough" comment seems on target. Short term thinking and a business model for a park that does not give permission to build anything of lasting value. If you're not in the room to actually see how decisions get made (and i was not) it's hard to know how these things really happen.

    Where's theres smoke, theres a burning cabin with the gas shut off.
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  9. #39

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    Quote Originally Posted by dshimel
    Pooh wasn't built becuase they thought it would be a huge long-term draw.

    Pooh was built to do two things...

    1) Allow them to shut Country Bears. That AA filled attraction had a huge maintenance budget. Plywood and fiberglass don't have NEAR the maintenance budget of electro-mechanical AAs. Profits go up just by cutting costs.

    2) Allow them to convert the whole back end of Critter Country into a giant Pooh shop. In the U.S. Pooh sells more merchandise than Mickey... well not last year with Mickey's 75th bday, but in most years.


    In my mind this was the problem with everything Pressler and Harris did. They were penny wise but pound foolish. Switch out an old show with a "new" ride that is "just good enough" to save a couple million in maintenance and sells a couple million more in merchandise, instead of using the location to do something much better that will bring an extra million people to the park, spending $50 - $100 each.
    I agree with you...

    It is a classic example not just of Pressler/Harris... But of Micheal Eisner's "singles and doubles" philosophy... The philosophy that you don't have to spend much to create a product, but you charge a premium in the hopes that one will be successful and you will get greater gains...

    Lets look at Pooh for a second here as an example...

    The latest venture to bring a new character into the brand is not turning out so well... The Heffalump Movie was grossing $24 million world wide with a production budget of $20 million (cheap for an animated feature - this is what I mean by a "single") not counting distribution costs. That is to date. Yes it will be in profit, (notice I say "will be") but I wouldn't call that return growth in sales for this brand.

    I am sure the hope is that they will sell a Heffalump through DCP at the store at the end of the ride... (after all you got to have new products to boost the sluggish sales of a ride that doesn't attract anyone...)

    With all product lines at some point you reach a market saturation... That is when brand managment steps in and you must pull back the brand in order to save it's profitablity... I think Pooh is way past this point... You have the live action TV series, you have the animated series, and you have several movies out on video...

    Wait a sec, I gotta get back on topic for a moment... I am begining to digress in to film...

    Now you have pooh ride with card board and really cool lighting effects... But does the attraction, if it stood alone, have a sustainable draw? Not in the slightest... It is an after effect of a marketing campain... When did it open? 2003? They hoped it would draw people to the park I bet... Didn't work did it?

    It is one thing to be in PP flying over London in a pirate ship, but to be attacked by plywood woosles in a wobling beehive? Yeah, that is "hip and trendy" alright...

    It doesn't take long for a "single" doesn't help the company unless a run is scored... No runs scored here... All men should be "out..."
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