MARKET ROUNDUP | |
Dow | -23.60 to 18,116.84 |
S&P 500 | -0.64 to 2,109.66 |
Nasdaq | +5.00 to 4,960.97 |
10-YR Yield | -0.074 to 2.059% |
Gold | -$2.90 to $1,202.10 |
Crude Oil | -$1.54 to $49.27 |
I’m a born and bred South Floridian. I’ve lived within a two-hour drive of Orlando all my life (save for my college years in Boston). I have 9- and 12-year-old daughters, a 15-year-old stepson, and a wife who spent most of her life living in the frozen confines of Chicago before joining me here in the Sunshine State.
So trust me when I tell you that I know a few things about the Walt Disney Co. (DIS, Weiss Ratings: A)! I’ve been to the Magic Kingdom, Epcot and Hollywood Studios more times than I can count. I’ve stayed at several on-park and off-park hotels around central Florida. And I’ve bought enough grilled turkey legs, frozen lemonades, stuffed toys, and collectible pins and lanyards to keep Disney’s shareholders fat and happy for years!
|
|
Sunny Florida |
All of that is why I couldn’t help but comment on the Mouse House’s big news — that a standard, one-day ticket to the Magic Kingdom just breached the triple-digit barrier! Specifically, you’ll now have to pay $105 to visit the main park in Orlando — up 6 percent from a year ago.
Prices are also going up for its other Orlando-area parks, and Disney’s southern California attractions — putting them within a whisker of triple-digit territory! And if you’re a Florida resident (you get discounts not available to out-of-staters!), it’ll now set you back $529 for an annual pass. That’s up from $485. No wonder the U.K.’s Daily Mail newspaper tweaked Disney with the headline “It’s an EXPENSIVE world after all.”
But you know what I think? People will suck it up and pay it! Nothing in Disney’s recent corporate results suggests the company is having trouble attracting hordes of visitors or filling its thousands upon thousands of hotel rooms.
If anything, Disney continues to reinvent itself to keep the parks fresh. It recently rolled out a Snow White-themed roller coaster at the Magic Kingdom, and is in the process of re-constructing and re-branding its Norway pavilion ride at Epcot as a “Frozen” attraction.
Its FastPass and MagicBand wristband technology programs are also incredibly popular, helping to make visiting the parks (and spending gobs of dough while you’re there!) easier. Plus, the decent labor market, low gas prices, and lousy weather in pretty much the entire country EXCEPT for Southern California and Florida all make a Disney vacation much more attainable and attractive.
“If anything, Disney continues to reinvent itself to keep the parks fresh.” |
Of course, Orlando is about much more than Disney. The price hikes there should lead to similar increases soon at SeaWorld, Universal Orlando Resort, and other nearby attractions.
But again, with new rides and attractions like the expanded Harry Potter-themed area at Universal, I’m expecting Americans to keep showing up. As a matter of fact, I’ll be there with my girls to drink the nonalcoholic “Butterbeer” and tackle the Gringotts bank ride myself in a couple weeks.
No wonder shares of Disney and Universal’s parent Comcast (CMCSA, Weiss Ratings: A-) keep hitting new all-time highs!
So what do you think? Is Disney getting too greedy? Will it kill the golden mouse by breaking the triple-digit ticket barrier? Or is this just the latest in a long line of increases that won’t hurt attendance? Do you think Disney shares are still a buy here? Or would you stay away?
And how about Disney’s competitors? Will they follow suit, and if so, what does that mean for American and foreign vacationers? Here’s the link to the Money and Markets website again. Let your voice be heard — before you lose it from screaming too loud on a theme park thrill ride!
Our Readers Speak |
The squabbling continues in Europe, and so does the debate at the website over what should happen with Greece, Germany, and other troubled EU members.
Reader Robert C. tried to put some historical perspective on the latest drama, noting that Greece doesn’t exactly have a solid credit history! His comments:
“I just finished reading a great book titled ‘This Time is Different, Eight Centuries of Financial Folly’ by Carmen Reinhart and Kenneth Rogoff. The authors studied 200 years of sovereign default and banking crisis from 1800 to 2008. In this period of time, Greece wins the prize of being in default for 50.6 years and in a banking crisis for 4.4 years.
“The point of the book is that nothing ever changes. Greece and other countries follow the same pattern of excessive spending, borrowing and taxation. When these crises happen, we delude ourselves in to thinking that this time is different, when in reality, the normalcy bias takes over and instead of implementing pro growth policies, we do the same irresponsible things over and over again. Too many generations of people all over the world have suffered.”
Reader Mark picked up on that train of thought as well, saying: “The people in Greece keep electing leaders who will give them the easy way out with no thought of sacrifice or facing any kind of reality. Germany relented to yet another delay.
“Even if they work things out somehow and find a lasting solution, Greece is but one leg of the EU foundation and the rest are still crumbling. This will continue to affect the Euro/Dollar question until something more encompassing is put in place. As they say, ‘You can put lipstick on a pig …'”
Finally, Reader F.D. noted the irony of everyone criticizing Germany for its approach toward Greece given what it endured in the not-too-distant past. The comments:
“Many people are unhappy with the Germans for their ‘lack of compassion’ for the Greeks. But do you remember anyone offering to help the Germans when they had to pay considerable funds to integrate the former East Germany with West Germany after the reunification in 1989? I don’t.
“So now the German taxpayers are saying they have had enough. Why should they have to pay the Greeks for their tax evasion? Would you be willing to bail everyone else out when they stood by hoping secretly that you would fail to properly reunite your country? This should be remembered by all when thinking about the situation in Europe.”
Meanwhile, you also continued to talk about the recent move by Wal-Mart Stores (WMT, Weiss Ratings: B+) to raise wages.
Reader C.C. pointed out that people seem awfully jaded about Wal-Mart’s move, and might want to cut the company some slack:
“Folks sure like to beat up on Wal-Mart. Nothing they do could please some people. But so many do shop there and they DO save money. They are a good and successful company, pay a lot of taxes and provide thousands of jobs. NO ONE is forced to work there. They do have to make a profit. Give them credit for doing a good job!”
Reader John took a similar tack, and said the Wal-Mart workers he talked to were definitely happy with what their employer had done. His observations:
“I’m trying to see these moderate raises of salaries as a positive thing. I went to Wal-Mart today and talked to a number of employees. All of them were very pleased, even though this won’t raise them out of the poverty level.
“They also said they consider it a good management decision and will remain that way unless something negative shows up. They were all faithful to Wal-Mart management so I hope the company continues in good faith. I think they will. I pray they will. Happy employees result in great, successful businesses.”
Thanks again for adding your thoughts to the mix, and please continue to do so at the Money and Markets website. I believe Greece will probably get its money and buy some breathing room with it. Not because it’s the “right” thing to do, mind you, but because European officials fear a breakup in the euro currency union more than just about anything.
And as for Wal-Mart, let’s hope more American companies follow suit! We need workers AND shareholders to benefit financially in order for the economic recovery to broaden out.
Other Developments of the Day |
Union workers and management at West Coast ports reached a tentative deal that would settle their contract dispute. But it could take several weeks to clear the backlog of containers, ships, and cargo that built up during the labor crisis.
The acquisition-hungry drug company Valeant Pharmaceuticals (VRX, Weiss Ratings: C) is at it again. It announced plans to buy Salix Pharmaceuticals (SLXP, Weiss Ratings: C-) for $158 per share, or around $10 billion total. Salix is a somewhat-tarnished drug company that Valeant wants for products used to treat stomach ailments.
We’ll hear from Federal Reserve Chairman Janet Yellen this week, since she is scheduled to speak before a hostile Congress on the state of the economy. As this Bloomberg story notes, both Republicans and Democrats are taking aim at the Fed’s policies, it method of operating, and more.
I managed to stay awake for at least an hour-and-change of last night’s Oscar telecast. But I’m surprised I made it even that long. This year’s crop of nominated films was basically a bunch of no-name, overly artsy stuff without much mass appeal or viewership. Heck, I had to Google more than half the movies just to figure out what they were about!
The film “Birdman” was the big winner, while actors, actresses and assorted other professionals associated with the even more obscure “Whiplash” and “The Grand Budapest Hotel” took home their own crop of Oscars.
Want to … er … “squawk” about the latest crop of Oscar winners? Or let me know if a C-note sounds reasonable for a day at Disney? Then head on over to the website and have at it!
Until next time,
Mike LarsonÂ
{ 37 comments }
Mikey et al,
I know people beat up $WMT and maybe deservedly so. I think maybe their groceries have no impact on our economy. But, they are a major root cause for the destruction of small VC capitalism in our country. Even owner-heir Alice Walton can’t stand the way the company has turned out. They are the major contributor, excluding auto, to the ever-so-growing trade deficit. The next major decline for the middle O’Merikan is the nonsensical fees and erroneous charges the “Big 5” banks are levying. $WFC is making it almost impossible to trade with or without broker assistance. The fees outweigh any short-term gains one can make. This issue needs immediate addressing, or the people need to make a run on the banks to change their minds rapidly. It is not our fault they are not making interest monies. If anyone has good ideas about where to bank and trading platforms, please feel free to reach me on Twitter @wild_herring or StockTwits @DrWild. Good luck investing these days people.
I believe Disney is just leading,what the rest of the country is going to be experiencing.High inflation is on it’s way.Some reasons.1)Fed,state and cities forcing higher wages,called raising minimum wage,2)Walmart,the nation’s largest employer raising wages.These moves will force competitors to raise wages,to keep/obtain employees.Everyone else employed,will be seeing higher wages,to keep the wage differentials.You can’t expect some employee making $10 an hour,after working at Walmart,to not get a raise,if entry level gets an increase.This flows all the way up the wage scale.3)Recent strikes at West coast ports and oil refineries may mean that union power has bottomed and on the way up.That would make sense,since govt reports much higher employment and a tightening labor market.The Fed will likely accommodate these wage increases by supplying more fiat currency,to allow people to pay the higher prices coming from higher wages,Obamacare and likely higher commodities.So,my conclusion.GOT GOLD?
Mike,
Wish I lived as close to Disney World as you do, as I would be a season ticket holder. Awaiting a chance to go back to Disneyland, California as soon as the grand kids are old enough. Don’t tell Disney, but the wholesome fun you can have there, is, err, well you could probably charge my family double and we’d still go!
I remember when there were ticket books to purchase for the rides, but once Disneyland changed to just an entry fee and ‘unlimited’ rides, the lines for everything grew, the wait times increased incessantly, and the park became an ant hill of people. I haven’t been there in over 30 years even though I live in California; but I am sure that this latest price increase won’t deter others with young children. I wonder what Walt would think of what his ‘Magic Kingdom’ has become.
I’m a long-time subscriber to Safe Money, and have benefited from it, and do definitely appreciate your insights on a daily basis. However, I see NO benefit in us subscribers wasting our time reading the opinion of any single subscriber expressing his opinion when we have NO idea of his knowledge of the given subject. I’m here to get YOUR input, not the input of some unknown.
Mike: I generally agree with your comments about finance. However, your comment about the Oscars is way off your expertise. People who love films, love good stories that aren’t just bubble gum and popcorn. Most film goers want value for their money and those Oscar films represent that. The fact that you never heard of these films tells me what you do like…”mindless crap”.
I imagine that I will be in the minority, but they really are starting to stretch the “limit” people can afford. I have a daughter that lives in Florida. She has had an annual pass for a long time. She is switching to Universal…just more affordable. She is a real Disney lover too. My wife and I bought a 10-pass ticket a couple years ago, which was a good deal. The passes were one-day park hopper with no expiration date. Say goodbye to those deals too. They will no longer be offering tickets with no expiration date. Even though our daughter lives close to WDW, we will likely not go as often after our present passes are used. Just too expensive. Even the parking is up to $17 now. I don’t think they will lose the occasional visitor or those that have never gone before and want to pony up for the new prices. But I do think that those that have been frequent visitors from out-of-state or the Floridians with annual passes will likely pause to reflect on how often they really want to go. All I can say is: M-I-C…K-E-Y….O-U-C-H-E!!!
You know what might really screw everybody up on the Greek issue? Suppose that Putin decides to step in and give $20 billion to Greece. He might as well, he doesn’t actually have any money but he has some cash flow. He could front that from even his depleted oil revenue as the impact on the EU and the U S would be worth it to him.
Mike,
It’s hard to cry greed when Disney continues to get the crowds. Just last week we waited 115 minutes to get on the Soarin’ ride. But what worries me is what I witnessed with a little survey I did with myself. I watched 10 families go through the ticket booth and counted one family that paid cash. In my mind I wondered how many of those credit card sales won’t be paid off for a very long time at a high interest rate, making that ticket at an actual amount of (you fill in the blank). But what really makes me yell greed is when that venue( in this case Disney World) also owns the parking lot and then charges to use their venue. In this case, with parking at $17 a car, if a family of four goes to the park another $4.25 a person is hidden into the cost of entering.
Disney is a wonderful place for all ages. Please keep it in Orlando with its over paved areas and excessive animation. Don’t export it to places like the Keys. Keep your Disney folks in Orlando and don’t send “Boat People” to pristine southern Florida.
Disney just continues to milk the public every chance they get but as long as they can get people to stand in line for TWO HOURS for one ride it won’t change.Take a look at the salaries of some of the executives and you don’t need to know anything more.It is obscene.
Just one more reason not to live in Florida.
The Oscars? Hell no, I didn’t watch them! I am 68+ years old and have never seen such crap coming out of Hollywood in all my years! It’s become so bad that over the past few years, I have cancelled HBO, Cinemax, Showtime, etc., simply because the movies they are showing aren’t entertaining! Give me the old shoot-’em-ups and drama anytime! It wouldn’t be bad if sometimes they found some good actors to play the parts, too!
Weiss Watchdog downgraded Panasonic to D- suggesting to sell…
Anyone have reasons to hold on for a rebound?
Joe
Seconding your comments about the Oscars. Haven’t gone to a movie theatre in the last year. Tickets are $14 in Manhattan. And, like you, I had never heard of the films, except for “Birdman”, which I didn’t want to see. But you couldn’t get the Academy to skip a year. They often miss giving awards to those who really deserved them, like Hitchcock, and others.
A c note in the winter time.yes.yes.yes in the summer time with long line. And hot. No no no. He’ll no.I think theirso a lot money moving in the system right now infLatin I think is right around the corner. Will see so u think things r high now just wait….
Americans do not want reality.
They want a fantasy.
However, think it is a sell on any rally.
The stock that is.
I used to work for Disney. They are like any other corporation.So be careful you do not fall in love with the Mouse.
Re: Oscars
I have never watched an “Oscar” show in my 70 years, and the last movie I attended was “The Passion of the Christ.” Am I surprised Oscar ratings were down? No, but I’m surprised such prideful, selfish showmanship has ANY audience whatsoever.
Of course inflation is rampant in all phases of the market, and Disney is no different. However, $105. per admission is going to rule out a lot of families with several children, and that’s sad because Mickey Mouse and his buddies are what healthy fantasy is made of.
It’s still nothing but bread and circuses to keep the masses comfortably numb.
The Oscars couldn’t have finished on a worse note. Birdman was the worst fim of the bunch. Preferential voting since 2009 has really given us a stinker this time.
Long lines? Sounds like Disney need to build more rides. “Good to hear they’re jam-packed and raising prices” Maybe you should buy their stock instead of a day ticket?
Have seen some of the Oscar nods. The “Budapest Hotel” offering was a real loser in our estimation as was “Boyhood.” Have stopped watching the ridiculous Oscar event because it is such a masturbatory spectacle of Hollywood’s narcissists. They are rarely in touch with their viewing audience and don’t seem to mind that most people don’t care about their jaded nonsense.
I gave up on the Oscars quite a few years ago. BORING! Yes the movIes are obscure, the Average age of the judges is 63 and over 60% are men. Totally ridiculous! It’s young people who go to movies.
This country has lost its mind when a 60% male voter ratio considered ridiculous. Janet, according to statistics the average human has on testicle and one breast. I guess anything different must be proof of some conspiracy?. Lighten up on the perceived sexism and you’ll live a happier life.
Do not forget the 7% tax when you total the cost.
Angelina Jolie did a an excellent job of directing Jack O’Connell in Laura Hillenbrand’s autobiography of Louis Zamperini’s inspiring WW II saga. It grossed $159,000,000. It should have been a sweep. By all means don’t take my word for it though. I’m just another brain dead subscriber wasting your time with my opinions. I’m sure Roger knows best. Jim
Hollywood is incapable of acknowledging that a beautiful young actress could direct on the level of a Frank Capra. It is incapable of acknowledging that unknown foreign actors like O’Connell and Ishihara make the pretty boys look like the amateurs they are. But most of all the Hollywood Left can never acknowledge that America is an exceptional Nation that produces exceptional individuals who do exceptional things. The result isn’t so much garbage as it is just plain old mediocrity. Jim
Perhaps I enjoyed “the best exotic marigold hotel” being of a “certain age” as well as female. It’s not a guys movie nor for the younger crowd. Maggie Smith can say more with one word or one line and an expression than any actress I know as evidence by her roll in Downton Abbey as well this movie. Judi Dench has been a favorite since “As Time Goes By” first appeared on TV. Also, Penelope Wilton’s roll portrayed her as a strong, independent woman as on Downton Abbey. She plays it so very well. I do not recall the name of the young hotel operator who is trying to make everyone happy with the run-down conditions of the hotel he desperately wants to become a success, but he is funny and makes you wish you really could help him. There’s laughs, problems, hurts, frustrations and touches of anger. It was a movie with great acting and one I could understand without having to have someone explained to me, and am anticipating seeing the second one in March. They could rate it for the very mature audiences and be right! ;)
I have lived 90 miles from Orlando for many years befor and after Disney World was built.
I have to been to Orlando many times before and after Disney World existed but never been to the park. I hate crowds , and always considered it expensive.
30 years ago when I learned that Dizzy Whirled would host any politician for $0 charge, but wouldn’t discount for FL residents, plus Dizzy Whirled did little to enhance the natural beauty of FL, I decided to personally boycott the theme park; I haven’t reneged on my vow and have convinced several family members to do the same.
Once it became known that Disney hosts “Gay Days” where the pink is out in full force – usually naked – and bullying any other “normal” people, that was it for “family-friendly” Disney.
For us, Disney was a once in a lifetime visit, because it’s just too expensive. We not only had the expense of the tickets, but the airplane ride and hotel stay. I will never go back unless it’s with grandchildren. I know they have to make money and that it’s very expensive to run an operation like that. But it’s a world for the wealthy, not for the poor who can only dream about going.
It must be very costly to run a theme park of the quality of the Disney World sites. Whatever the reason, however, it seems they are pricing admission our of the reach of a huge portion of the population, especially those working at low wages and those on fixed incomes. It seems to be the age old story; the rich get richer and the poor have children.
Aside from the ever more exorbitant prices, my complaint is that so much of that time you paid for is spent standing in unending lines. The idea of reserving a time slot for you to show up for a ride is a worthy first effort. But while waiting for your time slot you can spend the rest of your day standing in other lines. uggh
It appears that Disney is getting somewhat greedy. For the number of people that pour into Disney’s theme parks each year, the admission should not be so exorbitant.Soon the only way a poor family can gain admission will be through the Make-A-Wish Foundation.
All I can say is that they are lucky that they don’t have to rely on me in order to make a profit.
If they did the tickets would be reasonable or they would be out of business. Like you, I went to Disney when the prices were reasonable but it will be a cold day in the proverbial hot place when I pay that kind of exorbitant prices.
Will people keep on going to Disney?? the answer is: what will overall inflation do and will wages increase enough to cover that.? Food, clothing, shelter, and transportation come first. R