New Investments – Disney and Target

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)

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 😛

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 🙂

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 \(^_^)/

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＾●）