Showing posts with label Disney. Show all posts
Showing posts with label Disney. Show all posts

Wednesday, February 8, 2012

Peter Frampton and Perpetuities - Yay!



An Annuity and Ye Olde BA II Plus Business Calculator

For example’s sake, let’s say you can purchase a coin operated laundry machine business for $80,000 outright or you can make installment payments of 10,000 a year for 10 years. Which is the better deal? If the discount rate is 8%, we would break out our hand BA II Plus business calculator and enter the digits as follows:

P/Y = 1

N = 10

I/Y = 8

PMT = $10,000

CPT PV

The result is $67,101. Thus, it would be wiser to take the installment payment deal and use the rest to stock up the detergent dispensers with Tide.

A Perpetuity Goes on Forever, Just Like the Peter Frampton Song Do You Feel Like We Do

To find the present value of a perpetuity, you simply divide the annual payment by the interest rate. For example, a bond that pays a $50 coupon each year with an interest rate of 10 percent has a present value of $500.

PV = $50 / .10 = $500

Mark A. White provides us with a very interesting example of a perpetuity in his workbook, Financial Analysis With an Electronic Calculator: “Former US President John F. Kennedy’s grave in Arlington Cemetery is marked by an ‘eternal flame,’ which has burned continuosly since his assassination in 1963. Suppose that annual fuel expenses were estimated at $1,200 per year, and the annual interest rate at that time was 5 percent. How much should this portion of the monument have cost at the time of its construction?”[i]

Answer = $24,000

PV = $1,200 / .05

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Building a Small Business That Warren Buffett Would Love,available at Amazon.comorBarnesandNoble.com.
The over-arching vision of Building a Small Business That Warren Buffett Would Loveis to create
One Million Jobs.
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[i] Financial Analysis With an Electronic Calculator, Mark A. White, Fourth Edition, McGraw Hill, 2000, p30




Thursday, February 2, 2012

New Disney Destination: To Infinity and Beyond! Part 4

The Numbers

Shares of Disney were down 3.5% year to date in 2011 due in part to a lackluster movie performance and softer park attendance, but fourth quarter 2011 saw the company’s EPS increase 24% to a record $2.52 compared to $2.03 in the prior year. (For a full run-down of a long-term analysis, see the supplemental, Warren Buffett Diagnostic.)

Disney is trading at 89% of its 52 week trading range, 15.6 times earnings and has a 13.5% marginal growth rate. Although it does not appear cheap right now, the long-term prospect looks like it will reach infinity and beyond.



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Building a Small Business That Warren Buffett Would Love, available at Amazon.comorBarnesandNoble.com.

The over-arching vision of Building a Small Business That Warren Buffett Would Loveis to create
One Million Jobs.
Like us on Facebook to find out how you can support this mission!

Sunday, January 29, 2012

Reach Financial Independence, Lose Weight, Find the Ideal Job

Success Principles

  • Make an I want list: 30 things you want to be, 30 things you want to do and 30 things you want to have.
  • What’s the potential opportunity in this … I believe the world is plotting to do me good today, I can’t wait to see what it is.
  • Reread your goals 3x a day – in the morning and before going to bed.
  • A goals book = a binder with pictures of your goals.
  • Make a list of 101 goals.

Chunk it down using mind mapping:

  • Center circle = your goal
  • Outside circles = major categories of tasks you’ll need to accomplish to achieve the greater goal.
  • Spokes – draw spokes radiating outward from each mini-circle and label each one. Write every single step you’ll need to take. Break down each one of the more detailed task spokes with action items to help you create a master to-do list. See The Mind Map Book by Tony Buzan and Barry Buzan.
  • Make a to-do list: convert all of the to-do items into daily action items by listing each one on your daily to-do lists and committing to a completion date for each one.

The One Minute Millionaire – Robert Allen

Nine guidelines for creating effective affirmations

  1. Start with the words I am
  2. Use the present tense – describe what you want as if you already have it.
  3. State it in the positive – affirm what you want, not what you don’t want. “I am enjoying the thrill of flying.”
  4. Keep it brief – think of it as an advertising jingle.
  5. Make it specific – I am enjoying driving my 1965, white Ford Mustang.
  6. Include an action word ending with –ing. “I am confidently expressing myself openly and honestly.”
  7. Include at least one dynamic emotion or feeling word. Include the emotional state you would be feeling if you had already achieved the goal. “enjoying, joyfully, happily, celebrating, proudly, peacefully, enthusiastic, lovingly, triumphant.”
  8. Make affirmations for yourself, not others.
  9. Add or something better – sometimes there is something or someone better that is available for us.

How to create affirmations

Visualize what you would like to create. See things just as you would like them to be. Place yourself inside the picture and see things through your eyes. If you want a car, see the world inside the car as you are driving it.

  • Hear the sounds you would be hearing if you had already achieved your vision.
  • Feel the feeling you want to feel when you have created what you want.
  • Describe what you are experiencing in a brief statement, including what you are feeling.
  • If necessary, edit your affirmation to make it meet all of the above guidelines.

Affirmations and Visualization

Review your affirmations one to three times a day – morning, middle, end of day.

  1. Read out loud if appropriate
  2. Close your eyes and visualize yourself as the affirmation describes. See the scene from inside yourself as if you were living it.
  3. Hear any sounds you might hear, include people congratulating you and telling you how pleased they are with your success.
  4. Feel the feelings that you will feel when you achieve that success.
  5. Say your affirmation again and then repeat this process with the next affirmation.
  6. Record your affirmations and listen to them.
  7. Repeat your affirmations in the first person (“I am”), second person, and third person.
  8. Use this question in both your personal and business life:
  9. On a scale of 1 to 10, how would you rate the quality of our relationship (service/product) during the last week (2 weeks/month/etc.)
  10. Anything less gets the follow-up: what would make it a 10?

Keep score of what you want more of – decide where you need to keep score in order to manifest your vision and achieve your goals. Keep score in all areas of your life: financial, professional, school, recreation and fun time, health and fitness, family and other relationships, personal projects, and contributions to others. Post your scores where you can see them.

John Kremer’s 1001 Ways to Market Your Book

Five specific things that move you toward your goal – if you would go to a large tree every day and take five swings with an axe, eventually, no matter how large the tree, it would have to come down.

Begin inventorying and keeping track of your major successes – start by dividing your life into three equal time periods (for example, for a 45 year old, from birth to 15, 15 to 30 and 30 to 45). Then list three successes you’ve had for each time period. The second step is to list 100 or more of your life successes.

Create a victory log – keep a written record of your successes. By recalling and writing down your successes each day, you log them into your long-term memory, which enhances your self-esteem and builds your self-confidence. When you are about to take a big step, for example, negotiating a multi-million dollar deal, read the victory log to build self-confidence.

Display your success symbols – a valuable technique that will help build your self-esteem and motivate you to greater future success is the practice of surrounding yourself with awards, pictures and other objects that remind you of your successes. Make a special place, a shelf or a victory wall that you will see every day.

The Mirror Exercise – do this for a minimum of three months. Just before going to bed, stand in front of a mirror and appreciate yourself for all that you have accomplished during the day. Start with a few seconds of looking directly into the eyes of the person in the mirror. Then address yourself by name and begin appreciating yourself out loud for the following things:

  • Any achievements during the day.
  • Any personal disciplines you kept – dietary, exercise, reading, etc.
  • Any temptations that you did not give in to – desserts, staying up to late, TV
  • Maintain eye contact throughout, finish with “I love you.”

The Daily Success Focus Journal

At the end of the day, identify five things that you accomplished during the day (or do this weekly.) Any area – work, school, family, etc.

Write it out in a table like so: Success, Reason (why it was so important), Further Progress, Next Action

Example: Conducted a great staff meeting, it created the team spirit we were lacking, plan on off-site staff development day, form a committee with Ann and Bob.

Visualize your ideal next day the night before.

Create a stop doing list, make the things on your list “policies.”

Stop wasting time and start programming.

Example – I don’t lend money, I am not a bank.

Mastermind Meetings – Share what’s new, negotiate for time, individual members speak while the group listens and brainstorms, make a commitment to stretch, end with a moment of gratitude, be accountable,

The questions:

  1. If we were meeting three years from today, what has to have happened during that 3 year period for you to feel happy about your progress?
  2. What are the biggest dangers you’ll have to face and deal with in order to achieve that progress?
  3. What are the biggest opportunities that you would need to focus on and capture to achieve those things?
  4. What strengths will you need to reinforce and maximize, and what skills and resources will you need to develop that you don’t currently have in order to capture those opportunities?
  5. Take yourself through these questions.

The releasing questions – what am I feeling right now, could I welcome and allow it, could I let it go, would I let it go, when.

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Building a Small Business That Warren Buffett Would Love, available at Amazon.comorBarnesandNoble.com.

The over-arching vision of Building a Small Business That Warren Buffett Would Loveis to create
One Million Jobs.
Like us on Facebook to find out how you can support this mission!

Friday, January 27, 2012

New Disney Destination: To Infinity and Beyond! Part 3

Be Our Guest - The Movies

Okay, so the movies in 2011 reeked worse than Bambi’s side-kick with a signature flop, Mars Needs Moms bringing in an estimated $21.4 million in gross domestic ticket sales on top of an estimated $175 million budget[i] and other productions delivering a lackluster performance. The good news though is that the company is regrouping for 2012 with a Lion-King sized strategy: fewer movies, bigger budgets and international appeal. Disney movies slated for release this year include the first couple of Marvel flicks since the company’s acquisition, a Monsters, Inc. sequel, a Disney Animation film and a prequel to Wizard of Oz. Even though the movie segment experienced a bigger drop than Splash Mountain in 2011, it appears to be slated for a healthy comeback in 2012.

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Building a Small Business That Warren Buffett Would Love, available at Amazon.com orBarnesandNoble.com.

The over-arching vision of Building a Small Business That Warren Buffett Would Love is to create
One Million Jobs.
Like us on Facebook to find out how you can support this mission!



Monday, January 23, 2012

A New Disney Destination: To Infinity and Beyond!

Giant Mouse-Ears, Big Dividend

At the End of November 2011 the Walt Disney Company increased its dividend from $.40 to $.60, a 50% boost bringing its yield close to 1.7%. This fact coupled with the company’s stock buyback plan of 400 million shares,[i] indicates that a “great big, beautiful tomorrow”[ii] exists for this company.

Typically, a dividend increase is a signal of confidence for the business and its long-term prospects since a dividend after-all is a commitment to put money in investors’ pockets and should not soon be cut. In the case of the company that Mickey built, this increase represents a three-fold hike over historic bumps: in the last eight years, the Disney dividend has been raised six times [iii] and never by more than 15%. This current dividend liftoff is bigger than Spaceship Earth.

A Fabulous Log Flume of a Company

The Walt Disney Company is a not-so small world of cable properties, theme parks, hotels, cruise ships, movies and merchandise. The cable properties, the hugest portion of this animal safari, represent 67% of operating income and include the ABC, ESPN, and Disney Channel networks. Highlighting its importance even further are the huge transmission fees that the cable segment generates from cable and satellite providers for ABC. Disney is not so much a theme park and animated feature company nowadays as it is a cable network which recently secured a contract with the NFL to broadcast its games through 2021. Can I get a“Yo-Ho” anyone?



Building a Small Business That Warren Buffett Would Love,
available at Amazon.com orBarnesandNoble.com.


Available at Amazon.com and BarnesandNoble.com!





[i] Walt Disney Company May 10th, SEC 10-Q

[ii] Richard M. Sherman and Robert B. Sherman, “There’s a Great Big Beautiful Tomorrow,” .1964

Monday, January 16, 2012

Your Financial Independence Goal

Here is the picture of financial independence with your income statement on the top and balance sheet on the bottom:






  • The income statement represents all income and expenses ... anything left over can be used for saving, investing, Toys R Us.
  • The balance sheet includes everything you own, Assets, everything you owe, Liabilities, and the difference between the two, Equity. If you own a car worth $10,000 and owe $2,000 on it, your asset value is $10,000, the liability is $2,000 and the equity is $8,000.

In order to become financially independent, it is necessary to buy enough cash flowing assets such as rental property, dividend paying stocks and pinball machines, so that the cash "flowing-in" is equal to or greater than monthly expenses. A person with $2,000 in monthly expenses and $2,000 in monthly cash flow is financially independent.

The ellipse above connecting the income statement and the balance sheet represents the cash flow from cash generating assets. It is important to have the ability to calculate the rate of return on these assets. An asset that delivers $10,000 a year in cash flow and requires an initial investment of $10,000, has a rate of return of 100%. A similar asset that delivers $2,000 a year in cash flow and an initial investment of $10,000 has a rate of return of 20%. All else equal, assets with higher rates of return will get you to financial independence faster.


And now, a list off cash flowing assets:
  • Rental Property
  • Dividend Paying Stocks
  • Warren Buffett Style Stocks That Deliver Consistent Capital Gains
  • Covered Call Options
  • Royalties
  • Systematic Business Models
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To learn more about cash flowing assets such as Systematic Business Models and Warren Buffett Style Stocks, pre-order Building a Small Business That Warren Buffett Would Love, available at Amazon.com or BarnesandNoble.com.
Building a Small Business That Warren Buffett Would Love,available at Amazon.comorBarnesandNoble.com.
The over-arching vision of Building a Small Business That Warren Buffett Would Loveis to create
One Million Jobs.
Like us on Facebook to find out how you can support this mission!


Sunday, January 15, 2012

Walt Disney is Buried Beneath the Pirates of the Caribbean Ride


Walt Disney is one of the most interesting entrepreneurs and not just because he thwarted lung cancer via cryogenic freezing. (Yes folks, he is in fact interred beneath Pirates of the Caribbean, the last ride he helped design, which opened three months after his death in the spring of 1967.)


Location of the Hidden Staircase on the Pirates of the Caribbean Ride


I believe Walt Disney embodies the visionary spirit of American entrepreneurship: here is a guy who started with the sketch of a mouse and turned it into a multi-billion dollar business, starting with animated shorts, leading to full-length features and merchandising and finally to happiness-coma inducing theme parks which cause patrons to forget how much they have spent on turkey legs and mouse ears. The parks continue to metastasize just as Walt wanted, they will never stop growing.

The next time you attend a Disney theme park remember, it all started from the simple sketch of a mouse, and when you ride Pirates, look for the hidden staircase tucked behind and to the right, just after the first drop.


Pre-order your copy of Building a Small Business That Warren Buffett Would Love at Amazon.com or BarnesandNoble.com.


Available at Amazon.com and BarnesandNoble.com!

Friday, October 21, 2011

A Global Financial Tailspin

If a penalty is not present for those who take a risk and fail, what disincentive do they have to not try the risky maneuver again? I am a hands-off, deregulation man myself but after reading some of these articles and gaining an understanding of what went on, I think that if any regulation is needed it is in the bond market.

The stock market is fairly translucent, the bond market is opaque. This is what allowed the bond institutions to package up all of the junky mortgages and get them reclassified at a better rating. This was not the cause of the subprime mortgage catastrophe, but it certainly made it worse.

I believe it shouldn't be allowed to get to the point of failure in the first place, at least not on such a massive level based on a massive bet that was founded on unethical financial practices.

The more I read about this the more I come to understand that what happened in the secondary markets, the rolling of the bad loans into tranches which were then rolled into CDOs to mask the bad loans which were then insured with credit default swaps, it was like "Dumb and Dumber Go to a Casino." The problem is, they were having fun making these high stakes, ludicrous bets with billions of dollars. I find it hard to believe that a few key individuals could have been responsible for throwing us into a global, financial tailspin but the more I read, the more I believe this to be the case.

I believe in capitalism and free markets but when a few key players have the power to destroy the free market and opportunity for others, a referee must step in.

Monday, September 19, 2011

Business Plan Financials Notes


“Funding and financials go hand-in-hand., John”

“Just like Lisa Marie Presley and divorce papers,” John said.

“The financials tell you how much you need for funding, and the funding relates back to how much profit is in the financials.”

“So this would be in the sources and uses of funds sheet, the amount of financing I need?”

“Yes, that is correct John. One of the first sheets the banker will turn to is the sources and uses of funds. They want to know how much you need and what it is going to be used for.

“Additionally, it is wise to tie the financials back to the text in your narrative. Also, investors like having the track record of an existing business to compare with the projections for the new business. So, it pays to inject real world numbers of comparables when possible.”

“This is where the advantage of a franchise comes into play,” John said.

“Yep, a franchise typically will have real-world comparable numbers to call on. If the business is a start-up then friendly non-competitor numbers, public company data or primary marketing research can be used.”

“Just as you described earlier.”

“Exact-a-mundo.

“In the business plan, the business and marketing sections should provide the financial assumptions. Although it is probably a good measure to have an assumptions subsection as well.”

“Just like the Who the night that Keith Moon passed out on the drums.”

Do not sugarcoat the numbers or present blue sky in this section. Investors will see right through this and when the numbers lose credibility the whole plan falls apart. If investors and/or bankers can't trust your numbers they won't trust you.

The opening of the financials section should be a one-page overview of the financial data. If the plan is being prepared for the purposes of attracting funding, the amount needed and what you're willing to give in return - interest, ownership, and the like – needs to be included.

Relevant Financials to Include in Your Business Plan

Existing Businesses:

Uses of Funds

Cash Flow Statement (3 – 5 years)

Income Statement (3 – 5 years)

Income Projections

Breakeven Analysis

Balance Sheet

Business Financial History or Loan Application

New Businesses:

Uses of Funds

Cash Flow Statement (3 – 5 years)

Income Statement (3 – 5 years)

Income Projections

Breakeven Analysis

Loan Application

It may also be useful to include a startup budget for a new business. This will help get an accurate picture of what you'll need in order to get your business up and running.



Building a Small Business That Warren Buffett Would Love - Available Everywhere, Spring 2012

Friday, September 9, 2011

Warren Buffett and Return on Equity

Death of the Compounding Engine

First, the business must have earnings. Secondly, the business must have the ability to generate those earnings using a reasonable base of equity. This results in a high return on equity. Thirdly, the business must have the ability to retain the earnings at the same high rate of return. If a business cannot retain the earnings then the compounding engine is destroyed.

Let Me Have a Dollar

If I had a magical process for investing capital at a high rate of return, let’s say at 20%, and you invest $5 with me, at the end of the year I will have made you $1.

You will now be faced with three options:

  1. You can take the $1 in which case you can spend it or invest it elsewhere, perhaps in a llama farm
  2. You can leave the $1 with me and allow me to reinvest it for you.
  3. Or together, we can use the $1 to buyout existing shareholders.

The first questions that should come to mind, if you leave the money with me to reinvest, is “are our children learning” and will I have the ability to continue generating the 20% rate of return? Secondly, if you take the $1, what rate of return can you expect to achieve… in the llama farm? The answer to the first question is found in two components:


  1. The track record of ROE in my business.
  2. The historic retained earnings off of my business’ balance sheet.

If historically, my business has retained earnings and the ROE has remained strong, averaging 20%, then by all appearances, the business has the ability to “put the $1 to good use”, reinvesting it at the high rates of return on equity. If on the other hand my business has historically retained earnings (plowed them back into the business for expansion/new business projects, llama farms, etcetera) yet the return on equity has steadily dropped over the years, then it appears that I have poorly allocated retained earnings into low returning investments and I do not have the capability to effectively expand the business or at the very least, the core, original business has begun to suck wind. Either way, you will see this as a drop in ROE and perhaps a paltry, anemic ROE track record.

Back to our original options which truly exist within the context of two scenarios:

  1. I have the ability to reinvest the $1 earnings at a 20% rate of return.
  2. I do not have the ability to reinvest the $1 earnings at a 20% rate of return.

What would you do with the dollar in each case?

Under scenario A, if you take the $1 away from me, then in the context of an optimal investing strategy, you must find another investment that generates a 20% or greater return in order to beat what I am delivering for you, unless of course you just want to go purchase, let’s say a dozen Krispy Kreme donuts, sit on the couch and pig out, in which case this is a moot discussion.

Under scenario B, if my track record is sub-par or mediocre at best, then you should take the $1 and invest it elsewhere if you can beat my return. Let’s say I generate a 4% on a regular basis and your local bank is offering a CD paying 5.5%. In this scenario, you would be better off (by 1.5%) to take your dollar and invest it at the bank. As a matter of fact, I would strongly argue that if the ROE track record of my business has been subpar, then you should give serious consideration to yanking your entire investment and moving it elsewhere, preferably to a company with a strong record of return on equity. This is exactly what Warren Buffett did when he learned that the original Berkshire Hathaway textile business had poor underlying economics.[i] He began buying better businesses.



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Building a Small Business That Warren Buffett Would Love,available atAmazon.comorBarnesandNoble.com.
The over-arching vision of Building a Small Business That Warren Buffett Would Loveis to create
One Million Jobs.
Like us on Facebook to find out how you can support this mission!



[i] Schroeder, Alice. The Snowball. 1st ed. New York: Bantam, 2008. Print.

Lincoln! Live!

The Address Given at Gettysburg to Dedicate the New National Cememtary

Four score and seven years ago our fathers brought forth on this continent, a new nation, conceived in Liberty, and dedicated to the proposition that all men are created equal.

Now we are engaged in a great civil war, testing whether that nation, or any nation so conceived and so dedicated, can long endure. We are met on a great battle-field of that war. We have come to dedicate a portion of that field, as a final resting place for those who here gave their lives that that nation might live. It is altogether fitting and proper that we should do this.

But, in a larger sense, we can not dedicate -- we can not consecrate -- we can not hallow -- this ground. The brave men, living and dead, who struggled here, have consecrated it, far above our poor power to add or detract. The world will little note, nor long remember what we say here, but it can never forget what they did here. It is for us the living, rather, to be dedicated here to the unfinished work which they who fought here have thus far so nobly advanced. It is rather for us to be here dedicated to the great task remaining before us -- that from these honored dead we take increased devotion to that cause for which they gave the last full measure of devotion -- that we here highly resolve that these dead shall not have died in vain -- that this nation, under God, shall have a new birth of freedom -- and that government of the people, by the people, for the people, shall not perish from the earth.






Building a Small Business That Warren Buffett Would Love - Available Everywhere, Spring 2012