Storming the Magic Kingdom: Wall Street and the Raiders…

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When you look at the long-term advance of stocks over the past four decades, an observation worth noting: It was good to be 24 in 84. Meaning if you were young and hungry and happened to work on Wall Street, the world was your oyster. Until it wasn’t.

Risk was rewarded, and a fair amount of luck was involved, disguised as skill. Not that these weren’t wicked smart people like Mike Milken, for example, the father of junk bonds. Because it was Milken who showed corporate raider Saul Steinberg how to storm Walt Disney’s castle with high-yield debt. Steinberg, like Captain Hook, had a boatload of treasure and eyed Disney’s undervalued stock as an easy target.

But it didn’t go as planned.

Steinberg opened up a saga worthy of Peter Pan where instead of a company sold off in pieces, we still have a theme park in Florida and a company once again with a stock price looking like it’s back to the future.

Your Survival Guy reread the saga this summer, Storming the Magic Kingdom: Wall Street, The Raiders, and the Battle for Disney by John Taylor, and one section that stood out above all others had nothing to do with the takeover drama. It had to do with a former rock and roll band promoter who was now working in high finance on Wall Street. “How did that happen?” I thought. He said he needed to be where the action was, and rock and roll had nothing on Wall Street.

Makes my skin crawl.

And history repeats.

Today, with easy money gone and the rockers and rollers back in the studio, they complain interest rates are too high. Gone are the inflated meme stocks and cryptocurrencies.

Look at interest rates and debt, and tell me what the catalyst for price increases will be. The fun may be over.

Markets are a boom-and-bust fantasyland. Risk is never recognized until after the bust and is invisible during it. Pay attention.

Action Line: Your Survival Guy is always focused on risk—the return of assets, not return on assets. Not everyone escaped the 80s unscathed (even if they were in the right). When you want to focus on your risk, let’s talk.

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E.J. Smith - Your Survival Guy

E.J. Smith is Founder of YourSurvivalGuy.com, Managing Director at Richard C. Young & Co., Ltd., a Managing Editor of Richardcyoung.com, and Editor-in-Chief of Youngresearch.com. His focus at all times is on preparing clients and readers for “Times Like These.” E.J. graduated from Babson College in Wellesley, Massachusetts, with a B.S. in finance and investments. In 1995, E.J. began his investment career at Fidelity Investments in Boston before joining Richard C. Young & Co., Ltd. in 1998. E.J. has trained at Sig Sauer Academy in Epping, NH. His first drum set was a 5-piece Slingerland with Zildjians. He grew-up worshiping Neil Peart (RIP) of the band Rush, and loves the song Tom Sawyer—the name of his family’s boat, a Grady-White Canyon 306. He grew up in Mattapoisett, MA, an idyllic small town on the water near Cape Cod. He spends time in Newport, RI and Bartlett, NH—both as far away from Wall Street as one could mentally get. The Newport office is on a quiet, tree lined street not far from the harbor and the log cabin in Bartlett, NH, the “Live Free or Die” state, sits on the edge of the White Mountain National Forest. He enjoys spending time in Key West (RIP JB) and Paris. Please get in touch with E.J. at ejsmith@yoursurvivalguy.com To sign up for my free monthly Survive & Thrive letter, click here.

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