As indicated over the last few weeks, I took small profits in Disney ($87 cost base) & liquidated my stake. During the holding period, this underperformed the S&P 500 for my portfolio.

I think this company can do well over time. Streaming has delivered the needed profit inflection and the film division has performed well lately (minus Snow White). At the same time, those positive developments are now in the rearview, and it’s hard to sustainably win against Netflix, Apple, Google, Amazon and every other content creator. This field is fiercely competitive, and that’s why Disney+ subscriber growth has been non-existent since the pandemic pop. At the same time, Delta has already come out warning about weak travel demand while international data points to inbound U.S. travel weakness for Q1. This is rampant geopolitical noise washing through the global economy in my mind, but still will likely materially impact Disney specifically. This should weigh on domestic park performance, which is the cash cow here. Finally, the most compelling part of Disney’s business right now is its programmatic advertising growth within streaming. That is powered by a close partnership with The Trade Desk. So? As I build that position larger and larger (see below), I feel like I’m gaining exposure to the parts of Disney I like best — and don’t feel the need to own the rest.

Simply put, my conviction for all other holdings is higher and I want to reallocate my time, money and attention there. I used the money to add to the following names:

I am exceedingly confident in Niccol’s ability to turn things around with Starbucks. The work he did with a troubled Chipotle brand when he took over was not a fluke. I expect the same performance at Starbucks over time, with similar changes now being implemented. I am equally confident in Trade Desk’s Jeff Green quickly righting the ship and I expanded more on those thoughts last week (section 3).

Nu trades for 19x forward earnings and a PEG ratio close to 0.5x. Enough said for a rapidly growing fundamental darling. Mercado Libre trades for 42x forward earnings and a PEG of 1.35x. I think MELI is the highest quality business in Latin America and an obvious compounding machine in the years and decades to come. Nu is a close second. I also see currency headwinds quickly fading for both Mercado Libre and Nu to add yet another growth tailwind for both models in 2025.

DraftKings (following positive hold rate data for the NCAA basketball tournament) now trades for 26x forward earnings. Even when we ignore 460% profit growth this year and use the next two years in our PEG calculation, the growth multiple sits at a highly compelling 0.5x… again for a market leader in a growth sector. I think this one is obvious and I’m a bit surprised the stock hasn’t reflected all of its business momentum just yet. It’s one of two share kings (for sports gambling and iCasino) in a quickly growing sector with plenty of legalization left to go. It continues to slash marketing intensity while enjoying thriving customer acquisition. It just filed for an events contract license to expand into new bet types, while New Jersey just sent Kalshi and Robinhood a cease & desist letter for them to halt their operations. I think more of those letters are inevitable. 

I was already fully allocated for financial services and I just added more exposure to that cohort. Usually, that would have forced me to trim other names. I did not do that, as SoFi and PayPal were the two options and I am not willing to sell any shares of either at this time. If SoFi goes on another run, I will lighten up there a tad solely to stay within portfolio rules and responsible allocations. I’m sitting on hefty SoFi profits and the company is still emerging… but is currently sized with the mega-cap anchors in the portfolio. I think that may be a little too big. I’ll keep you posted on this in real-time. I envision bringing it down closer to 5% of holdings whenever Mr. Market cooperates. I’m in no rush. This also has nothing to do with the Robinhood product event from this week, which I will cover tomorrow.

Finally, I did not use the remaining emergency savings cushion to fund any of these purchases. All of that cash came from Disney. I still have that chunk left to deploy. When combining that with the 0.84% cash position you see below and small deposits over the last few weeks, total cash availability is right around 2.5% of total holdings. My macro views have not changed in the slightest since I published that piece. I am continuing to dispassionately run the playbook.

Here’s my updated portfolio & performance vs. benchmarks:

Please note that my 12.3% compounded annual lead vs. the S&P 500 does not include today’s price action. The lead will likely fall just below 12% based on where things stand right now.