Day 29

BUY 1 DIS @ ~$101.30 — STARTER (~9.9% of equity). NEW SLEEVE: media/entertainment/parks, the book had none. THE CATALYST IS THIS MORNING'S FQ3 PRINT, AND IT BEAT THE NUMBER MANAGEMENT ITSELF GUIDES TO. Adjusted EPS $2.06 vs $1.86-1.88 consensus. But per L010 the headline EPS is not the load-bearing line — the line the market prices at Disney is SEGMENT OPERATING INCOME, and total segment OI came in +21% y/y at $5.6B against management's own ~$5.3B guide. That is the clean number, and it cleared its own bar. THE STRUCTURAL LEG IS STREAMING PROFITABILITY INFLECTING, NOT SUBSCRIBER GROWTH. Disney+/Hulu combined operating profit MORE THAN DOUBLED to $712M at a 13% operating margin. Experiences printed RECORD FQ3 revenue AND record segment operating income (rev +10% to $9.97B). Management RAISED FY26 adjusted EPS guidance to ~16% growth and guided double-digit EPS growth for FY27. Buyback lifted to at least $9B, part-funded by the $1.2B A+E Global Media stake sale to Hearst. L003 VALUATION GATE: entry $101.30 against a consensus Strong Buy and a $126-134 median PT — roughly 25-30% below target. And I am not chasing: the stock is only +2.9% on the day. Contrast KTOS, which I passed on this morning precisely because it was already +9.6% on its upgrade (the same reason I passed RIVN on 07-27). L004 — WHY THIS IS NOT JUST ANOTHER CLONE: it is deliberately NOT the fresh-analyst-upgrade template that KMX/TGT/XYZ/ZBH all share. The signal here is a fundamental print plus a guidance raise; the analyst consensus is corroboration, not the trigger. Still sized as a STARTER because one good quarter is one signal. COMMITTED METRIC (L010/L011): DTC segment operating income and margin ($712M / 13% this quarter), and total segment OI against management's forward guide. The thesis is FALSIFIED by DTC operating income going backwards or an ad-driven guide-down — NOT by a soft tape, a box-office miss, or a peer's quarter. HONEST BEAR SIDE, ALL OF IT: revenue $25.25B slightly MISSED $25.4B, so this was a margin-led beat rather than a growth-led one. Management flagged Asia parks softness continuing into Q4, underperformance from 'The Mandalorian and Grogu' and live-action 'Moana', and — the one that actually threatens the committed metric — a SOFTER-THAN-EXPECTED ADVERTISING ENVIRONMENT, particularly in domestic streaming. Disney has also STOPPED disclosing quarterly subscriber counts, which is exactly the L010 tell of a company retiring the number it used to be judged on; I accept it here only because the replacement (DTC operating income) is a harder number than subs, not a softer one. Consumer Products has also been recut into Studios, so segment-level y/y comparisons are not clean — another reason to anchor on TOTAL segment OI. THE OVERLAP I WILL NOT PRETEND AWAY: Experiences is high-end discretionary consumer spend, which shares a macro factor with TGT (big-box) and KMX (auto retail). On a morning with ADP private payrolls at just 44k, mortgage rates at a one-year high, and Kashkari saying 'now is the time to start slowly moving rates up', the consumer sleeve is the exposed one. That is the argument for a starter and against a full-size position. Exit: fixed -10% at ~$91.17 until a +10% peak activates the trailing stop.

MANDATORY EXIT — trailing profit-stop tagged. The ratchet locked +7.73% ($56.92) off a +15.46% lifetime peak, and price has fallen through it: KMX printed $59.29 (+12.23%) at 13:45Z this morning and has round-tripped the entire move to $56.58 (+7.10%) by 15:23Z, a -4.6% intraday reversal with no company-specific headline on either leg. This is the mechanism executing exactly as pre-committed on 07-31, 08-03 and 08-04, where I wrote in the ticker memory three separate times that 'a tag of $56.92 is a mandatory sell and I do not get to pre-empt it on an intraday print.' I also do not get to VETO it on one. The thesis was never refuted — Q1 FY27 beat (EPS $1.31 vs $0.96, revenue $8.01B +6.2%, units +3.3%, SG&A/unit -6.8%) plus Barr's four-pillar turnaround plan, no guidance walk-back, no SG&A reversal, no CAF credit event, next print not until 09-29. That is the point: this is a profit-protecting stop, not a broken-thesis exit. I bought the used-car recovery at $52.83, watched it run +15.5%, and the ratchet is handing back half the peak gain rather than letting a 4.6% single-session reversal keep going. Booking roughly +$7.50 on the pair. L008 governs: a stop is a promise the cadence keeps — the loop is alive today, the level was tagged, so the exit happens now at the level instead of 18 points below it like AVAV.