 Good day, fellow investors! There has been a lot of interest and a lot of questions in your comments about Disney, so it's proper that I make a video about it. I'm going to explain what kind of an investment Disney is at this moment in time, because we see the stock price that went nowhere in the last three years. It's even down 9.18%. However, there are the great brands, there is the different businesses from the media network, from the parks and resorts, studios, consumer products etc etc. Now before digging into Disney, let me tell you that Buffett invested once in the company. That was in 1966 when the whole company was valued at 80 million and pre-tax profits were 21 million. Taxes were much, much higher back then. Nevertheless, he invested and he bought about 5% of the company, around 5 million he invested. He sold it next year for a 20% gain. If he would have held that 5 million until now, that would be now without the dividends around 5 billion. So, let's say he missed out on this one and you can see also that Buffett sometimes sells the big brands, the great brands he has been buying. However, he invested then because just the parks that were created then were costing more than the 80 million of the market cap. Let's see if that situation is similar now and what kind of an investment Disney is. I always like companies that have multiple separate segments, because that always makes it tough to analyze for others and thus creates opportunities, especially if there are segments that might explode in the future. We all know that Wall Street focuses on the next few quarters and not so much on the future and real value. Business segments are media, parks, studio entertainment and consumer products with interactive media. The media network makes the most revenue, followed by parks, studios and consumer products. All segments have positive operating income, which is very important. The biggest year ended 30 September was the media networks. There will be earnings coming out this Tuesday, so it will be interesting to see how that fits the company and how that change and whether the analysts are going to give Disney different perspective or they're going to stick to the main points why the stock is down is that you see the changes, you see the change, the right column, you see that media network revenues have been down, interactive media, consumer products, studio entertainment revenue down and operating income down in all but parks and resorts. Parkets and resorts are cyclical, so be careful with that when the next recession comes and that is what is baked in the price. ESPN has been having a tough time, number of viewers has been declining, which is always bad for advertisement, for revenues, for everything and now you see the segments and you see the top revenue coming from the media and you see that segment declining, that's something analysts don't see and that's what is baked in the price. So to invest in Disney you're investing in something that is unseen and that unseen might come from the new Fox acquisition. So Disney will acquire 21st Century Fox's film and television studios, its cable entertainment networks and international TV businesses. This will give it enough firepower to battle Netflix and Amazon and their streaming direct-to- consumer services. So the 52 billion acquisition is an all-stock acquisition that doesn't leverage the company, which is quite interesting but does dilute shareholders for about what 25%. So to alleviate the dilution Disney will spend 20 billion on buybacks, which are good if the company is if the stock price is less valuable than the intrinsic value of the company which the management thinks it is. So however if they manage to take advantage of the synergies with Fox, if they manage to package that into direct-to-consumer entertainment and then ship it like Netflix or Amazon and they become the third player in that space and they start really growing then the complete stock will have to be revalued and have a valuation like those other growth companies will see. They have the content, they have the capability, the question is will people really start paying to watch Disney directly? So there are two things that can happen. One is that the media empire continues to shrink, that profits continue to shrink, we see a recession, parks and resorts do much worse and then let's say the stock lingers around this price or continues to go down even more. That's one scenario. However the other scenario is much more positive and it's an explosive scenario. Let's say that in one, two years Disney really delivers, puts all the content into one great product, really delivers on it and shows huge growth numbers in subscription, premiums, payments, whatever and when that happens then you have an explosive stock in your hands. So there are two options, two scenarios nobody knows what will happen, we don't really know if their products will gain traction or not. Nobody can know that and that's the key with investing. You see the stock price, it has gone nowhere over three years. Perhaps they will get traction after four years. So if you invest now in Disney, the question is can you hold for four years and see nothing happen or see even the stock price decline a little bit? If they get traction, perhaps even in the next earnings, we see some traction, some more, something going on then we could see that hockey stick really happened. However you will see flat, flat, flat until that happens, if it happens and that's the kind of investment Disney is. High potential but let's say 50% downside risk if becomes really a cash cow and has to just milk the media and whatever it has. So great brands, great company, two scenarios, two investment scenarios. So you have to say to yourself okay how much to allocate to Disney if you like the company, what in relation to what can happen? Okay can I stick it out five, ten years? Can I stick to Disney whatever happens? And that's your question and whatever and then see, look at what happens and then take actions appropriately. If you really see that the direct-to-consumer media empire they are trying to build will not gain traction, will you sell at a loss, move to something else or will you stick to it no matter what? That's the question. You have to find your answer and see how that fits your portfolio. So the key component when investing in Disney is psychological. Nobody knows what will happen, nobody knows when it will happen and nobody knows whether it will happen. However the potential is there, it is huge and if you want exposure to that if you missed on the Netflix train on the Amazon train then you might want to take a chance with Disney. However we know the risks, we know the potential reward and you have to see how that fits your portfolio and whether there are better investments out there. Thank you for watching, don't forget to check my book on Amazon, the links are in the description below. Looking forward to your comments and I'll see you in the next video.