Actually, Buffett did buy Disney, twice. Once, in 1966, and the other at the time of the Cap Cities transaction. Buffett had an option of cash or stock, or a combination. He chose all stock, and additionally bought shares of Disney in the market. From his 1995 letter:|
We have also recently bought Disney stock in the market.
One more bit of history: I first became interested in Disney in 1966, when its market valuation was less than $90 million, even though the company had earned around $21 million pre-tax in 1965 and was
sitting with more cash than debt. At Disneyland, the $17 million Pirates of the Caribbean ride would soon open. Imagine my excitement a company selling at only five times rides!
Duly impressed, Buffett Partnership Ltd. bought a significant amount of Disney stock at a split-adjusted price of 31› per share. That decision may appear brilliant, given that the stock now sells for
$66. But your Chairman was up to the task of nullifying it: In 1967 I sold out at 48› per share.
Oh well, we're happy to be once again a large owner of a business with both unique assets and outstanding management.
Judging purely from these descriptions, I would say that Disney today is much different than at the times he bought the stock. As well, it fails the "moron" test. But I'll always be looking for the right entry.