Why I Bought Disney (NYSE: DIS) This is a love story. I'll say this right form the start so you don't confuse the potential of investing lessons contained in this explanation with the mush I'm about to flesh out. Back in 1986 I had been dating a girl I was really fond of for a few months. I had even told my parents that I had just met the girl I would someday marry the night I met her. I had never said that before. I hope to never say that again. Our courting went well except for one problem. During our first Christmas together I was able to identify every single one of the presents that she got me. I wasn't proud of my prescient knack. It's just that we immediately tapped into one another and while some couples finish each other's sentences I had simply taken that one step further to nail exactly what I was about to unwrap. So a few months later it's June and my birthday rolls around. She thinks she has finally got me. She hands over a rectangular frame and dares me to guess what's inside. A share of Disney, I say. Her smile evaporates. Curses. Right again. Of course, what she didn't realize is that while I was sure that she was special this pretty much locked me up for keeps. She got me. She really got me. While we both lived in Miami she had been to Disney World maybe 2-3 times growing up. With my family it was almost a monthly obsession. Even though we were a 3-4 hour drive away from the Magic Kingdom it was just a natural thing to do on the occasional weekend. So of all of the stocks that I own this is the one that I never bought. It was gifted to me. When it split 4-for-1 in the early 1990s I kept two of the shares and gifted each of my sisters with one share apiece. Yes, I told you I grew up in a family of Disney fanatics. So I can't honestly answer why I bought Disney -- because I didn't. I can say that the company's collection of theme parks, networks, cruise ships, animation and film studios all add up to create the ultimate family entertainment conglomerate. While I may be critical about the company from time to time (especially during the last few years of Eisner's CEO tenure) it's ultimately a different kind of love story. Why I would sell Disney? Two shares. That's all I own. I'm unlikely to sell. Then again, I have often thought of growing my stake in the company to make it a more honest part of my portfolio. The one thing often keeping me away form that is that one should never have an emotional attachment to a stock they own and that's exactly what I would have with Disney. Yet, at a distance, the company looks pretty good here from the vantage point of April of 2005 when I'm writing this. Its ABC network, after years of struggling, is back strong thanks to new hit shows like Lost and Desperate Housewives. ESPN is as popular as ever. Disney cruise bookings are at an all-time high. The theme park and resorts will kick off a 50th anniversary Disneyland celebration in May that will assure a steady flow of traffic through the turnstiles. The animation studio will miss Pixar and the live action segment has produced less hits than I would prefer to see (especially now with the Weinstein brothers from Miramax leaving the company later this year) but you can't expect Disney to be hitting on all cylinders. Disney would need to crater badly for me to move on. It has turned its back on tradition before in scaling back its inhouse animation studio and compromising the quality of its theme parks by adding cookie cutter off-the-shelf carnival attractions instead of the E-ticket imagineered wonder that kept my family coming back when I was a knee-high. I think new CEO Robert Iger will help turn that around. He has to realize that it will be the easy Brownie points for him in appealing to the diehards on some level. Yet a continued deviation from what made Disney great would prompt me to re-evaluate my position. Go Back UNDER

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