Mar 062013
 

Very uncertain times for the stock market these days. The Dow Jones, which is a barometer for many companies in the US, is at record highs, surpassing previous levels in 2007/2008 before the recession. In fact many stocks are at 52 week highs right now. This means we are at a critical point. We will either see stocks continue to move up like they’ve been doing recently, or see an immediate pull back. Looking at the 40 year chart of the US stock market it’s pretty clear why some people would be nervous as we might be at another peak (0.O)

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But uncertainty can be an opportunity. As investors we must have a greater appetite for winning than a fear of losing, but we have to be careful not to make stupid mistakes. So my plan is to buy some defensive stocks. If stocks should fall after my initial purchase then I probably won’t lose very much because defensive companies tend to be less volatile. The first pick is The Walt Disney Company. I’ve had my eye on this one for awhile and have wrote in January that I plan to buy some this year. This is a huge company, worth over $100 billion, more than Viacom, News Corp, or Time Warner. Disney is a household name with a very strong brand. They also remained innovative and stayed profitable throughout 90 years across generations of fans. Here are some Disney characters some of you might have grown up with. Well, their hipster versions anyway 😛

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Today Disney employs over 100,000 people, and run some of the largest projects in the entertainment business. Not only do they know how to market themselves, but they actively seek other synergistic brands to buy and integrate into their empire. I love this business model 😀 If you want to have the most talented computer graphics engineers in the world working for you, what do you do? Trying to hire them is too mainstream. So instead Disney just buys the companies those people work for, lol. Disney purchased Pixar (famous for creating gorgeous computer animations) in 2006 for $7.4 billion. Disney leveraged Pixar’s renowned talents and technologies to help improve its own already established Walt Disney Animation Studios. Computer animated Disney films from before the Pixar acquisition were not very polished and received mixed reviews at best, such as “Chicken Little” in 2005 which got a 5.8 rating on IMDB. But films after 2006 like Tangled (7.8 on IMDB), or Wreck It Ralph (7.9 on IMDB) received better reviews and made more money at the box office. To be fair, the later movies had bigger budgets. But if you’ve watched these films I bet you’d agree that the production quality is much higher in 3D Disney films after the merger :0) Disney knows how to make money, how to satisfy their customers, how to stay relevant in an ever changing world, and how to put smiles on children’s faces all around the world. And I want to become a part of that Disney magic(⌒▽⌒)So I bought 30 shares of DIS for $56.55 per share earlier this morning 😉

My second pick is Target Corp. For Americans no introduction is needed. For Canadian readers who may not yet know, Target is a giant US retail chain like Walmart, only better 😉 But you will see for yourself because they just opened their first stores in Canada yesterday in Ontario, and over 100 more will open across the country by the end of the year 🙂

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More competition is good for consumers because it will likely mean lower prices :0) Welcome to Canada Target. I hope you get lots of customers here because I just bought 30 shares of TGT  today at $66.46 per share! Your earnings (after tax profits) have been growing every year for the last 5 years. If you keep this up then I’ll make my entire investment back by 2020 \(^_^)/

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I bought 30 shares of each company today and paid about $3700. If I had bought these same 60 shares a decade ago I would have paid about $1200 for them. Which means in just 10 years these companies have returned 200%. No telling what will happen in another 10 years from today but even half their historical returns wouldn’t be so bad 😀  Walt Disney once said “If you can dream it, you can do it.” Well I dream of becoming a millionaire some time in my thirties and I believe Disney and Target will help take me there (●^o^●)

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28 Comments on "New Investments – Disney and Target"

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JC @ Passive-Income-Pursuit
Guest

I already own TGT but keep forgetting to look more into DIS. DIS is surely another one of those companies that will always have a captive audience since they have new clients being born every day. I just wish they’d pay their dividend quarterly instead of semi-annually. Nice buys!

Mo' Money Mo' Houses (@momoneymohouses)
Guest

Amazing Disney images, and now I kinda want to buy some stocks too!

Pauline
Guest

I think Target is a great choice. You make a

good case for Disney but I don’t know how well

they are dealing with emerging markets like

Asia and yes they made a good move with Pixar

but before that were a bit behind on

animation. It is a very mature market and I

don’t know how much room they have for change

and improvement.

John S @ Frugal Rules
Guest

I bought some shares of Disney in my wife’s IRA at the bottom in 2008 and they have since more than doubled in value. 🙂 I think it’s one of those stocks that people forget about, but they’re massive and I do not see them going anywhere anytime soon.

Alex Yang (@yyangalex)
Guest

inspired by my Feb div growth portfolio update eh? 😛 i like TGT more as a defense play. its pretty similar to WMT and valuations are reasonable. DIS is interesting because its often misunderstood. the first thing that comes to mind when many folks think DIS is theme parks, studio movies, or consumer products/toys, but actually Disney’s most profitable segment is its TV networks, contributing over 50% of its profits. within its media networks segment, its MVP is ESPN, something not many people even know is owned by Disney

Alex Yang (@yyangalex)
Guest

PS: i find it amusing the stock is listed in the transaction as Disney Walt Company hahaha =P

Johnny ca$h
Guest
Johnny ca$h

Great buy Liquid. Strong companies.

Canadianbudgetbinder
Guest

Thanks for sharing this as I hope to learn more about investing this year. I know I have a long way to go but there has to be a starting point I guess.

Liquid
Admin

Best way to learn about something is doing it. Everyone starts somewhere 🙂

agentfang
Guest
agentfang

I’m a fan of Disney… went to Disneyworld last year for the very first time. Their compound there is HUGE! And Walt disney bought that land, so he’s not paying rent to anyone! Can’t wait for the new Target stores to hit in town. So are you planning on holding them for 10 years to come? The buy and hold is becoming the clear winner now after trading my profits away last year.

Ravi Gupta
Guest
Ravi Gupta

I learned something new, I did not know you could have your brokerage withhold income taxes. Is that Canada specific?

-Rg

theoutliermodel
Guest

Never thought of owning Disney, but I have considered Target. Where do you hold these – registered/unregistered? TFSA?

seapotato
Guest
seapotato

I like how you only have 3 shares of Apple lol

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