Investing Lessons from Disney's Magic Figures
What Disney's characters teach us about investing and the stock market
We recently looked into the Walt Disney Company. What started as a cartoon of Mickey Mouse, grew into one of the largest media conglomerates in this world.
But Disney is much more than media alone. Itâs a whole ecosystem around its famous characters and stories, brand, and IP. The company operates five theme parks, owns over fifty hotels, and even offers cruise holidays with one of their eight cruise ships.
In our deep dive, we covered everything you need to know before making an investment decision. However, we discovered that Disneyâs magical characters can help us become better investors by interpreting their quotes in different ways.
So, here are SEVEN Disney quotes that will help you focus on what is important and become a better investor.
âThe only thing predictable about life is its unpredictability.â - Remy, Ratatouille
No investor can predict the future.
People try to persuade you of the opposite every year, if not every day. However, as with all Disney films, this is all fiction.
Michael Burry correctly predicted the stock market crash in 2007, and his fund increased by more than 138% in just one year as a result. People may believe that âHe must be able to predict the future with that much conviction.â The opposite is true.
If ten million people predict all World Cup games, there will always be one person who is correct, regardless of the odds. This doesnât mean he or she is a genius. It is called being lucky. Itâs the law of large numbers.
With investing, Remy reminds you to be aware of unpredictable events. If youâre prepared for the unexpected, youâll be able to keep your emotions in check, just like during the Covid-19 outbreak.
âThe nicest thing about the rain is that it stops eventually.â - Eeyore, Winnie the Pooh
Eeyore is the iconic, gloomy donkey from Winnie the Pooh. In one of his rare moments of positivity, he saw the upside of bad weather: it eventually stops.
The same applies to investing. Markets can go down for years and years straight. While that hasnât happened in a while, eventually it will happen again. The worst thing you can do as an investor is selling during or after a rainy storm.
âTime in the market, beats timing the marketâ is one of these popular quotes that makes perfect sense when looking at the past.
âItâs little and broken, but still good. - Stitch, Lilo & Stitch
What happens after some rainy days on the stock exchange? Your positions likely get dragged down with it. Some positions might fall by over 90%.
During the dot-com crash in 2000, Amazon lost over 80% of its market share. At the same time, fundamentals looked decent, with growing revenues and operating metrics improving. Former CEO Jeff Bezos previously mentioned to always distinguish stock price from fundamentals.
Stitch knew this before and stated that beaten-down stocks can still be fantastic companies, but in other words. Always separate the numbers from the price you pay. Opportunities will arise.
âIâm only brave when I have to be. Being brave doesnât mean you go looking for trouble.â - Mufasa, The Lion King
There is a catch to Stitchâs lesson: not all small and broken stocks are good. Fortunately, Mufasa from The Lion King steps in to help.
His lesson is to only be brave when you have to be and not go looking for trouble. In the movie, he told this to his son Simba when he went on an adventure in the hyena territory.
If you are invested in, let's say, a company that has a great product but is loaded with debt. Suddenly, interest rates skyrocket and the stock plummets. Interest expenses jump, leading to even more pressure on the balance sheet.
Thatâs where you have to think deeply: âIs it brave and smart to buy more shares, or can this company go bankrupt?â In this case, it might be better to avoid troubles and not try to play the hero.
Feeling the Disney magic already? If you want to have access to our deep dives (including The Walt Disney Company), have insights into our personal portfolios, and become part of a community with high-quality investors, weâd love to welcome you!
âLike so many things, it is not whatâs outside, but what is inside that counts.â - Merchant, Aladdin
Merchants⌠they always try to make things more valuable in the perception of the potential customer. But donât be fooled. Investor Relations departments do the same thing.
Tattooed Chef went public via a SPAC (Special Purpose Acquisition Company) in 2020. It focused on frozen, plant-based foods. Its investor presentation was absolutely enchanting. Their storytelling was spectacular, and it projected sunshines and rainbows for the future.
They are (were) âvertically integrated,â resulting in âstrategic advantages.â We know how that story endedâŚ
Itâs scientifically proven that people are vulnerable to good storytelling. Morgan Housel once said;
âThe best story wins. Not the best idea, or the right idea, or the most rational idea. Just whoever tells a story that catches peopleâs attention and gets them to nod their heads is the one who tends to be rewarded.â
Many investors got onboard, but the company filed for bankruptcy in 2023. All the money was gone. So, donât get lured. Study the financials first, and weâd advise not going through the presentations at all.
âJust keep swimming. Just keep swimming, swimming, swimming. What do we do? We swim, swim.â - Dory, Nemo
Ah⌠Finding Nemo. One of the greatest movies I watched as a kid. What I obviously didnât mention back then is that Dory provided us with a lesson on compounding.
Time is the most crucial factor when compounding your money. You have to keep being invested all the time. Historical data from iShares shows that staying fully invested in stocks over a 20-year period yields 58% more than sitting out and missing just the 5 best-performing days.
So, always keep swimming along with Nemo and Dory.
âYes, the past can hurt. But the way I see it, you can either run from it or learn from it.â - Rafiki, The Lion King
One of the most important activities in life and investing is to reflect on your behavior, results, and decisions. Not all of us can beat the general stock market returns over the long run.
If youâre looking back on your past performance and notice that you structurally underperform the stock market, donât run away! There are plenty of ways to improve your returns if you change your strategy.
Learn from it. A few simple ETFs might do the job for you. It can hurt to acknowledge, but you will pick the fruits at a later stage.
âThe important thing is that we stick together.â - Buzz Lightyear, Toy Story
We get it.
Itâs difficult to constantly remind yourself and be aware of all investment wisdom in this world. More like-minded people result in more knowledge and intellect.
At The Dutch Investors, we have a community of around 200 investors with decades of experience in the stock market. We learn with and from each other. Itâs about building a repeatable process with an honest community of like-minded investors.
We would love to welcome you. Letâs help each other and stick together during difficult times in the market.