The start of December is testing this Teflon stock market. Wall Street’s open is looking rough for Tuesday after U.S. President Donald Trump said a China trade deal might have to wait until after the 2020 election. That came after the worst day for stocks in eight weeks.
We best just move on, to the call of the day, from Ross Gerber, president and chief executive of Gerber Kawasaki. Gerber told this column in March that Disney DIS, -0.63% would dominate over Netflix NFLX, -1.48% with its new streaming app. Up 37% for the year to date, the entertainment giant has been one of the best S&P 500 performers this year, making his call a smart one.
And for 2020, he’s sticking to that. “I think Disney upside could be another 20% to 25% from here. That’s still our biggest bet by far,” he told MarketWatch.
“I don’t think people fully realize the monopoly Disney created in Hollywood by not just content, but ability to monetize in so many different ways,” said Gerber, whose firm has $1 billion under management.
“So kids watch Frozen 1 on Disney Plus, then see Frozen 2 in the theaters, then buy Frozen dolls, etc., then watch Disney Plus again when Frozen 2 comes to the app,” he said. “So this cycle of movies to theme parks to merchandise to app is amazing.”
Netflix’s problem is that it makes movies for the app and there’s no monetization outside of keeping subscribers happy, he said. Gerber, who owns and likes Netflix stocks, though he’s sold a lot, said the streaming company needs a deal, maybe for movie theaters, so that it can start showing its films outside of the app.
He also likes investment company Blackstone Group BX, -2.43%, for its share distributions and potential upside