Netflix Inc. (NFLX)

62 million subs in US and 69 million worldwide. For five years it didn't have competition, and that competition has a body of existing content to stream (Disney+ and others). Compared that to Netflix, it needs to spend a lot on content. Yet, it isn't generating the cash flow to offset that cost. The question is: How many streamers will consumers subscribe to?

Chart went down, came back, now is quite flat. Lots of competition ahead from Disney. Kind of expensive. Higher beta. Growth rate susceptible to something going wrong. FANGs have been underperforming the broader market in the last 12 months. Will have to spend a lot to develop original content.

An amazing company and who is cutting their subscriptions? No one he knews. If you buy this, then you assume they will continue to raise rates and slow spending. He doesn't know that for sure and so he owns Disney instead.

Disney vs. Netflix over 10 years He owns both, but Netflix will see more grwoth as it penetrates internationally and doubling worldwide subscribers. They could expand into music and games. Disney pays a dividend, but Netflix will give you a higher total return. With Disney, be patient as they get into streaming, especially internationally.

A growth stock with 30% growth rates in the short term, especially internationally. The second half of this year will see great new content, like the new Scorsese film, The Irishman. This will drive viewership. Netflix changes the way we watch TV. Also, they haven't pulled the lever on adding ads (say, at a lower-tier subscription fee). There's room for both Disney+ and Netflix, based on consumer research he's seen. (Analysts’ price target is $395.65)

Their mid-April reporting was fine -- revenues and earnings were up 30% and 20%, respectively. Disney is creating a little apprehension in the space, but will not take over the space quickly. It is at risk to seeing the multiple collapse if there is a retracement in the market.