This week, I am inspired by Walt Disney World, a.k.a. "The Most Magical Place On Earth," where we spent Spring vacation for a family reunion with my wife's family and some friends. While waiting in lines and traveling to and from the park, I had time to reflect upon the success of Disney and how Walt Disney's philosophy can be applied to a successful investment strategy.
Walt Disney World is a tribute to the philosophy and life of Walter Elias Disney... and to the talents, the dedication, and the loyalty of the entire Disney organization that made Walt Disney's dream come true. May Walt Disney World bring Joy and Inspiration and New Knowledge to all who come to this happy place... a Magic Kingdom where the young at heart of all ages can laugh and play and learn — together.
— Roy Oliver Disney, October 25, 1971
If visitors equate magic, one cannot argue with the numbers. In 2014, the park hosted 19.3 million visitors, making it the most visited theme park in the world for that year. Brothers, Roy and Walt Disney, co-founded the Disney Brothers Studio on October 16, 1923. Walt was the creative man and Roy, a banker, made sure the company was financially stable.
Today, the Walt Disney Company (ticker: DIS) is the world's second largest media conglomerate in terms of revenue, after Comcast. Even if you have not visited its theme parks recently, you might be surprised how many ways Disney touches you every day. While best known for the films of The Walt Disney Studios, Disney also owns and operates Disney-ABC Television, Radio Disney, ESPN Inc., The Muppets Studio, Pixar Animation Studios, Marvel Entertainment, Marvel Studios, Lucasfilm, publishing, merchandising, and theater divisions. The company owns and licenses 14 theme parks around the world and has a successful music division. Look at Wikipedia's extensive list of assets owned by Disney.
The Power of Compounding
We believe that earnings matter and investing in quality companies can be rewarding over the long-term. We often talk about kerchunker® companies that grow earnings steadily quarter after quarter and year after year... they kerchunk, kerchunk, kerchunk! Not surprisingly, Disney’s earliest shareholders have been especially rewarded. Investors who purchased 100 shares when Disney was founded in 1957 paid $1,388 for those shares. As a result of stock splits, those 100 shares have grown to 38,400 shares at the end of last year, excluding reinvested cash dividends. As of April 29, those shares were worth more than $3.97 million! In addition, those early investors received approximately $52,608 in cash dividends last year, which was more than 37 times the acquisition price of those original 100 shares!
Favorite Walt Disney Quotes for Investing
Walt Disney was not only a visionary who transformed animation into an artform but also a shrewed businessman. Here are a few favorite quotes that can be applied to investing and personal finance.
- “I’d say it’s been my biggest problem all my life… it’s money. It takes a lot of money to make these dreams come true.”
Walt Disney faced money problems many times before reaching success. Achieving your dreams will likely require diligent planning, good strategy, and execution.
- “I only hope that we don’t lose sight of one thing – that it was all started by a mouse.”
Keep it simple. Avoid over diversification.
- “All our dreams can come true, if we have the courage to pursue them.”
Investing requires courage. Remember what Warren Buffett says, "Be fearful when others are greedy and greedy when others are fearful."
- “When you believe in a thing, believe in it all the way, implicitly and unquestionable.”
Walt Disney is an example of a visionary who not only had drive, but single mindedness and perserverance. These are great traits to look for in management teams of potential stocks worth owning.
- “I am not influenced by the techniques or fashions of any other motion picture company.”
Don't simply follow the crowd. Have conviction in your investment decisions, but don't forget to cut your losses.
- “The way to get started is to quit talking and begin doing.”
Success requires you to start. Too many people neglect their finances because they're too busy doing other things. Your financial success requires you to take the reigns, make it a priority, and go do it.
Please post your favorite Disney memories or Disney inspired investment thoughts in the comments below.
Editor's Note: This post was originally published in January 2014 and has been updated for freshness, accuracy, and comprehensiveness.