Investing lessons from the theme park trenches

5 take-aways, from research to endurance

Independent Investor per cent in the past year), (up 16 per cent), and

(up 21 per cent). All three pay nice dividends and are closely tied to consumer spending patterns. Based on how much park entry costs and how crowded its parks were last week, Disney still seems the preferred choice here.

We went on the ride Twisted Colossus at Six Flags Magic Mountain in Valencia, Calif. It was a wooden coaster, looking kind of lame against the backdrop of the other sleek and shiny steel coasters.

We didn’t expect much, and as the teen staff checked and doublechecked our restraint system I thought their boss must have been watching, as it all seemed a bit like overkill to me. Wooden coasters are generally shaky, but overall not very exciting to anyone who has spent any time on other rides. Well, boy did the Colossus ever prove us wrong.

By far the fastest wooden coaster I have ever been on — and then, it goes upside down a couple of times. It screams around corners and almost collides with the car it is racing.

Then, you go back up the giant ramp — and do it all again against another car full of people. What’s the investment theme here? Well, there are lots of companies in old, tired industries that investors often ignore. Companies such as which publishes magazines, or a “boring” auto parts company. But “old” or “boring” does automatically make a stock “bad.” Maybe, but maybe not. Each investment opportunity, as always, should be looked at individually. As an investor, you should never assume anything. Like our experience, you might get a good ride even with a tired old company. it was the diversity. At Six Flags, it was pretty much entirely filled with teenagers and millennials, with the odd parent like me towing around two younger kids.

At Disney, though, the crowd consisted of everyone: three-week-old babies to 100-year-old grandmas. Most everyone (kids under two free) has to pay — a lot — to get in.

Those not riding rides were almost pure profit for Disney. Not only did they pay to get in, but they likely also spent a small fortune on food and souvenirs.

At Six Flags, the teens all ignored the shops and restaurants and focused entirely on the rides.

The investment pickup? A company that focuses on everyone, like Disney, or, say Google, might have a better business than a company that limits its market opportunity.

There is a lot more involved, of course, but if you can find a company where the entire world is a potential customer it might be a better investment than one — say a teen retailer such as

(down 51 per cent in the past year) — that focuses on just one market niche.

Disney has a very equitable way of controlling crowds at its rides, called FastPass, and it works very well. But if you hadn’t done your research, you would not be able to utilize the system to the best of its abilities.

By careful planning, we waited five minutes for HyperSpace Mountain, while some customers waited more than two hours. Similarly, at Universal Studios, we simply bought our way to the front of the line, paying way more than a regular ticket. This saved us four hours at the Harry Potter ride.

This didn’t feel right, but certainly helped our day in the park.

The take-aways: investors — like theme park attendees — need to do their homework to maximize their returns. Park attendees — like companies — might do better if they have the balance sheet strength to utilize to their advantage any way they can.

Good luck with your investments this year. We truly hope the markets are less wild than Tatsu, X2, The Scream, Riddler’s Revenge, Viper, California Screamin’ and The Mummy, to name a few.