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> The valuations come from the sheer profit they generate, not their assets Hm? He's talking about the multiples on their earnings, aka their profit. How does
by darawk 8y ago
> The valuations come from the sheer profit they generate, not their assets
Hm? He's talking about the multiples on their earnings, aka their profit. How does anything you just said justify a high multiple?
- manigandham 8y agoThey generate profit with far less work than Disney, therefore their profit is much more protected and scalable with automation and tech. Original content and physical parks are very hard to invest in and make profitable, and Disney has had plenty of missteps recently. Also Google has Youtube which is replacing TV for many young people and full of original content that required no investment.
- darawk 8y agoa) That doesn't follow at all. How do you get from less effort to higher moat? b) So what? You're going to value a moat at a 100% premium NPV?
- manigandham 8y agoLess work to generate more money as an industry compared to Disney, that's why they have better valuations. The moat has nothing to do with that and is formed by their scale, which is almost impossible to break at this point. This is valued highly when it defends a multi-billion profit machine that nobody else can match.
- darawk 8y ago> Less work to generate more money as an industry compared to Disney, that's why they have better valuations. That speaks to margins, not moat. Margins are already incorporated in the 'earnings' number. High margins do not factor into your multiple.