I Bought 100 Shares of The Walt Disney Company as a Souvenir During My Visit to the Resort
After breakfast this morning at the Animal Kingdom lodge, we headed over to Downtown Disney. As we shopped for souvenirs before flying back to Kansas City tomorrow, I was in the enormous World of Disney store when I realized the best possible souvenir I could have would be ownership in the business. From the kitchen section, surrounded by Mickey Mouse spatulas and Minnie Mouse oven mitts, I took out my phone, remotely logged into one of my personal brokerage accounts, and purchased a small memento in the form of 100 shares of The Walt Disney Company at $33.04 per share.
The Walt Disney Company owns Walt Disney, Pixar, Marvel Comics, and a host of other intellectual property and media networks including ESPN.
Short of unforeseen circumstances, the plan is to keep the stock until I die (or at least are well into my golden years), serving as an enjoyable reminder of the experience every quarter when I review a consolidated report of our investment holdings. There will always be a single round lot, separated into reserves, marked with an asterisk in an out-of-the-way brokerage account that hasn’t been used very much save for special circumstances such as this. It’s my version of a snapshot or home movie that should survive long after any knickknacks, clothing, watches, or bags would.
This makes me happy, even though I don’t consider Walt Disney stock particularly compelling on a valuation basis (though, to be fair, the stock does seem reasonably priced) at current market levels, and we’re talking about a relatively tiny amount of money. Here is how I think about it: Today is Warren Buffett’s 81st birthday. In 52 years, I will be 81 years old. If The Walt Disney Company, with dividends, grows at 10% per annum for the next 52 years, the $3,304 that I put away today would have grown to $469,310 in pre-tax nominal terms.
That means when I am his age, God willing, I will be looking at the balance sheet, seeing a small asterisked investment that will have a cross-referenced file filled with movie clips and photographs from the trip. It’s my way of leaving a marker; kind of like planting a flag on the moon, that I can come back and visit in the future. The difference between what I could have earned by allocating the money to my main portfolios or businesses and what I do earn by owning Walt Disney stock at these levels is worth it to me because of the memories attached to the event. This would be an example of the sentimental streak that runs so deeply in my personality.
What will I do with it when I’m older? I might give the shares to my grandchildren, pay for them to visit a Disney resort every year, or donate it as a contribution to the Kennon & Green Foundation.
Note: There is no guarantee that The Walt Disney Company will grow at 10%, or even still be in business in 50 years. That’s a risk I’m willing to take because I’m essentially buying the stock as a souvenir that has a potential for a satisfactory payoff, but I’m not banking on or projecting that.
I was standing in the kitchen and candy section of The World of Disney when I decided to place the order.
Reader Comments (11)
Comments are presented chronologically, with replies indented beneath the comments to which they respond.
FratMan
August 31, 2011
Do you understand the kuckoo logic in only paying out the dividend once a year? If ever a company's payment to shareholders could be described as a 'dumb*ss dividend,' it's Disney's. Isn't that basically a form of shooting yourself in the foot from a corporate standpoint? Old people/income-oriented people won't touch the stock. If they changed it from .40 annual to .10 a quarter and raised it 10% a year for the next decade, it'd all work itself out, shutting up the people who complain about the 1% yield in the process.
PS congrats. If the shares compound at anything over 5% or so during your life, I'm guessing you'll be one of the few people who managed to make money during a trip to Disney World. So I tip my hat off to you on that.
Joshua Kennon
November 20, 2011
Replying to FratMan
Many private companies only pay a single annual dividend. Berkshire's subsidiaries only pay two dividends a year. It is far easier to account for and manage. For long-term investors, it doesn't matter at all. If I were retired, had 100% of my money in dividend stocks, and each company only paid a single annual dividend, there would be no disadvantage or reason to agitate for change. In some ways, I'd prefer it.
FratMan
September 11, 2012
Replying to Joshua Kennon
"For long-term investors, it doesn't matter at all." I was reading a report from the CEO of Realty Income (O), and he mentioned the advantages of being a monthly dividend company. Essentially, cutting a quarterly payout into thirds adds an effect to the compounding. Wouldn't you have a higher share count if Disney paid you $100 in dividends every month than if you received $1200 at the end of the year, assuming constant prices?
Joshua Kennon
September 11, 2012
Replying to FratMan
If prices are constant, which is never going to happen with a publicly traded company with any meaningful predictability, more frequent payouts could result in slightly higher rates of compounding, adjusted for the increased transfer agent costs.
For private businesses that you control? It doesn't make a difference. If you own a grocery store and you make $120,000 in profit, it doesn't matter if you take it out at Christmas, or if you distribute $10,000 per month in the twelve months of the next year.
It's one of those things that won't enter into the equation 99.99% of the time. It might have some advantage if you were living paycheck to paycheck and needed monthly income, but really I don't care if I'm paid my share of the earnings daily, weekly, monthly, quarterly, or annually, as long as the cash ends up in my hands. I tend to prefer Christmas distributions but that is just a personal quirk. It makes it seem like a gift, which has some psychological benefits.
Adam
November 6, 2014
Replying to Joshua Kennon
Where did you find out BBK subs only pay twice a year? Just curious.
Fernandov argas
March 4, 2012
Do you actually have a share like showing in your article? i mean i never saw that, i d like to buy a share like to my kids.
Joshua Kennon
March 7, 2012
Replying to Fernandov argas
Yes, you can buy a Walt Disney share just like that picture. If you want to give a share like that as a gift, the easiest way is to go to OneShare.com. They can get it framed for your child, along with a "Congratulations" certificate.
Over the years, I've bought hundreds of shares from them as gifts to give to friends and family members to teach them about investing and it's almost always been a pleasant experience (the exception being Walmart changing their stock certificate from a beautiful one shown on their site at the time to a horrible, ugly computer generated one from Computershare and there was nothing they could do about it; it was Walmart's fault, not theirs).
The direct link to buy a share of Disney as a gift is here:
http://www.oneshare.com/stock/disney
Edwin Chua
October 11, 2013
I've been a Disney shareholder since 1998 and been very happy with the performance. I think 50yrs from now, you'll be quite happy! 🙂
Joshua Kennon
January 12, 2014
Replying to Edwin Chua
Hello fellow owner! Nice to meet you!
Edwin Chua
January 12, 2014
Replying to Joshua Kennon
Nice to meet you as well!
sylvia
September 11, 2014
Replying to Joshua Kennon
Hello, my name is sylvia. I have 300 stock in disney thanks to my mom. I have had them since 1992 and I find in confusing. I don't understand stand it at all.