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Walking with Walt & taking a bite of Apple

The market was mixed and down again today but I saw it as an opportunity to continue my Minefield Stock Strategy.  [Watch for the explanation in the next episode of the Wealthsteading Podcast.]

Today I made small purchases of Disney (DIS) and Apple (AAPL):

  • Disney: They have been out-of-favor but seem to be finding support at their 50dma (and their longer term 2 year average).  The media has been hyping “cable cord cutting” and the loss of ESPN revenue…BUT the fact remains that they’re a diversified provider of CONTENT RICH ENTERTAINMENT…movies, sports, theme parks, toys, etc, etc, etc.  There will be much competition and declining profits for Cable providers like Comcast and portals like Netflix.  Some of that will spill over and effect Disney…BUT in the long run Disney will prevail because they provide content that people will want to consume, regardless of the method of delivery.  [Much like Nike prospers whether their products are bought at Walmart, Target, Macys, or Amazon.]  I had been concerned that the strong US Dollar would hurt the Theme Parks because of a loss of foreign tourist- that’s not occurring.  The 18PE is a reasonable valuation given their growth prospects.  They pay a 1.4% dividend.
  • Apple: I was considering buying Apple yesterday but didn’t get my order in.  Then they surprised me with their announce acquisition of a Chinese Uber-type company.   That caused the stock to bounce up…so I waited till late in the afternoon when the price had calmed down.  I like the acquisition but would have purchased it anyway for the following reasons.  In spite of their weakness, they seem to be finding support at their long term 4 year moving average.  Overall they’re a well-managed company with over $200 billion cash on hand.  That’s enough cash to outright purchase all but the 10 largest publically traded companies in the US…including the likes of AT&T, JP Morgan Chase, P&G, Verizon, Walmart, Pfizer, etc, etc, etc.  Not counting their cash, the valuation is a miserly 10PE.  Did I mention the 2.5% dividend?  In short, Apple is a “Utility” stock that offers growth and profit potential.

CAUTION- these stocks have RISK, thus they’re in my Minefield Portfolio not my Unicorn Rainbow Portfolio.  As always, invest with caution.

Have a good weekend…I’ll be demonstrating Amateur Radio to the Boy Scouts…living the dream!


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