Buy 300 Shares Of Nintendo (NTDOY) on 12/5/2016

I bought 300 shares of Nintendo (NTDOY) yesterday at $29.96. While I said I would like to buy Nintendo stock closer to $20, I changed my mind mainly because I don’t think the stock will go anywhere near that low and I hope the many planned software and hardware releases will drive the stock to new highs. If the stock goes lower from here, I may buy another 200 to 300 shares around $25.

1/17/2017 Update: I bought another 200 shares today at a price of $26.00 per share. I now own a total of $500 shares.

The Real Reason I Bought Nintendo Stock

The overriding reason I bought the stock is that it looks like Nintendo is finally acknowledging that their intellectual properties (Mario, Zelda, Donkey Kong, etc.) hold tremendous value and they can tap into that value by releasing mobile games. When legendary Nintendo game designer and producer Shigeru Miayamoto walked out onto the Apple stage two months ago, that signaled in my mind that the company was going to start embracing their mobile potential for real. At least they are leaning in that direction. 

I know the company will continue to make game systems, but it is this possibility that they will start making games aimed at the hundreds of millions of mobile devices that truly gets me excited

Super Mario RunSuper Mario Run for Android and IOS will be released on 12/15/2016 and it will be their first mobile game that has one of their top franchise characters. There was Pokemon Go (and we all saw the tremendous hype around that one), but Nintendo didn’t actually make that game and didn’t profit too much from it. Super Mario Run though, priced at $9.99, is all Nintendo (along with partner DeNA) and I think it will be a blockbuster hit. Fans have been clamoring for Nintendo games on mobile phones for years and they are finally going to get one. Two more games, Animal Crossing and Fire Emblem, are supposedly being made by DeNA but their release dates are unknown at this time. 

Nintendo games, franchises, and characters are loved the world over and I think they could be a powerhouse on mobile devises. I’m hoping Super Mario Run will convince the company to really start expanding into mobile and that is the main reason I am buying the stock. 

Other Reasons I’m Buying The Stock

Switch and ZeldaThe new game system Nintendo Switch is scheduled to be released in March 2017 and early rumors say that it will sell for $249 and $299. It will be a compact game system that allows users to play on their televisions and then take the game mobile when they need to leave the house. You can see Nintendo’s video here and that page will probably contain more information as we get closer to release date. 

Nintendo’s The Legend Of Zelda: Breath Of The Wild is one of the most anticipated games ever and will be released sometime next year for the Switch and Wii U. Unfortunately, it looks like Zelda won’t be ready in time to be released with the Switch and that is certainly a negative. But the game was the big winner, hype wise, at this years E3 and it should still be a massive hit. Just how many game systems it will help sell is unknown of course but we should be hearing a lot about the Switch and Zelda next year. 

nes-classic-edition-boxAnother hit that Nintendo has on its hands is the new retro NES Classic Addition console. This sells for $60 and comes with 30 pre-installed games from the past. Unfortunately, supplies are limited and people are having trouble getting these before Christmas. The rumors say that it is such a big hit that they could sell as many as they can make so there will be opportunity lost there. Nintendo probably isn’t making much on this game system but it is certainly getting the company name into customers minds once again. 

Nintendo is also getting into theme parks with the news that they will have attractions at Universal Studios Japan, Universal Orlando Resort and Universal Studios Hollywood. I don’t know how much of a money maker these will be but they serve as great advertising at the least and help cement the fun aspect of the Nintendo franchise characters into the minds of kids young and old.  

In Summary

So, my thinking is that the tailwinds will be solidly behind Nintendo for the next 6 months to a year and although the stock is expensive (P/E = 75) and pays almost no dividend, it might be a good time to buy and hope for continued good news. This probably won’t be a long term holding for me like many of the other stocks I have bought, but we will see. 

It does worry me a bit that the company might not be able to execute on their target delivery dates and no one knows wether the Switch will be a hit (the Wii U before it was a big dud) but those some of the risks inherent in buying stocks. 

10 Responses to “Buy 300 Shares Of Nintendo (NTDOY) on 12/5/2016”

  1. John says:

    Just stumbled upon your website today. Appreciate the transparency on all your trades! Curious to hear what your view is for the markets in 2017. More volatility? Expecting another Brexit type event or a Trump correction?

    Seems upside maybe limited at these record levels, but a lot of people have been saying that for the past few years and markets continue to churn higher. Any input would be appreciated.

    Tia
    John

    • Bruce Alan says:

      Unfortunately John, like you I don’t know what to expect in 2017. Everything you say is true and could happen. I expected a bigger (and longer in duration) drop sometime last year and that kept me from buying. The beginning month and a half of 2016 turned out to be the time to buy. But now these are record levels and its hard to buy up here but if you don’t, you might miss out. The only thing I know is that I don’t plan to sell anything (at least for now).

  2. Jeff says:

    Hey, New Investor,
    Instead of picking apart Bruce’s ‘pathetic’ 8% return by throwing out data most will not understand, how bout some good stock tips?
    U ever heard of ‘Constructive Criticism’?
    Geez…. People r haters nowadays…..
    Seems like every forum, there’s somebody that just wants to bash somebody that’s at least trying yet not giving any alternatives…..
    Jeff

  3. New Investor says:

    Well, I thought you learned something about investing by purchasing SPY to diversify your portfolio. You then bought Nintendo out of pure speculation. Few months profits of SPY was all offset by the loss of Nintendo in two weeks.
    US stock market is near record high and your investment is getting pathetic 8% gain in 3 years. I can’t imagine how much you will lose when the market turns bear. Your web site only serves one purpose: What NOT to do in investing. Looking forward to see how you do in the next 10 years.

    • Bruce Alan says:

      Thanks for reading “New Investor”. Actually though, I started with $150,000 in the portfolio the first year and added another $150,000 in year two. That makes the gain higher than the “pathetic 8%” you mention. Additionally, I have never had 100% of that money in the market and have had $100,000 or more in cash for more than a year. That makes the gain even higher when looking at just the amount that is invested in stocks. I don’t feel the need to have everything in the market and always feel more comfortable with some on the sidelines which is of course, my personal decision and yours may be different.

      As for my Nintendo purchase which I explained thoroughly, I may be wrong about its only been about one week! The question is where will the stock be in 3 months, 6 months, or a year? Not where it will be today or tomorrow. If I am wrong, then it won’t be the first time and it won’t be the last.

      BTW, if you are a great stock picker then I suggest you start your own website. Maybe you can make money charging people for your picks.

      • New Investor says:

        Let us compare your return to S&P 500 index apple to apple.
        Here are the data:
        S&P 500 index closing on 08/30/2013: 1632.97 (date start first $150000 investment)
        S&P 500 index closing on 12/31/2014: 2058.90 (date start second $150000 investment)
        S%P 500 index closing on 12/23/2016: 2263.79
        Bruce account cash amount on 12/23/2016: 116579.36
        Bruce account stock amount on 12/23/2016: 206948.90
        Bruce stock % on 12/23/2016 = 116579.36 / (116579.36 + 206948.90) = 63.97%

        Bruce investment return as of 12/23/2016:
        total principal: 300000
        total gain: 116579.36 + 206948.90 – 300000 = 23528.26
        total % gain = 23528.26 / 300000 = 7.84%

        S&P 500 Index return with same stock % as Bruce investment as of 12/23/2016
        – 8/30/2013 investment
        Principal in stock: 150000 x 63.97% = 95949.38
        Gain on 12/23/2016 : 95949.38 x (2263.79 – 1632.97) / 1632.97 = 37065.46
        – 12/31/2014 investment
        Principal in stock: 150000 x 63.97% = 95949.38
        Gain on 12/23/2016 : 95949.38 x (2263.79 – 2058.90) / 2058.90 = 9548.34
        – Total gain: 37065.46 + 9548.34 = 46613.80
        Total % gain = 46613.80 / (150000 + 150000) = 15.54%

        In a nut shell, your % gain is 7.84% while S&P 500 % gain is 15.54% using the same stock % and time line. Now you tell me is your return pathetic?

        You can keep burying your head in the sand. But readers are entitled to know the fact.

        Good luck.

        • Bruce Alan says:

          I won’t even bother to check your numbers (I don’t have the time or care as much as you apparently do) but I want to ask you one question: so what if they are “pathetic”?

          Please show me one place on this website where I have bragged about my returns or said that my return is greater than the S&P or said that I am a great stock picker. You seem to think the purpose of this website is to show how great an investor I am but you won’t find anything like that anywhere here. Additionally, there is no newsletter I am trying to sell you or paywall that you have to get through. Everything on this website is free for you to read, or not read.

          I have only said that I am showing my readers what stocks I buy and sell and that I believe all young (and youngish) people should familiarize themselves with stocks and start investing. Its the best way to save for retirement.

          I’m not sure where the anger comes from New Investor, and again I recommend you start your own website if you are sure you can do better. Or maybe you should forget about me and go on with your life?

          Oh, and Merry Christmas!

  4. Alyson Smith says:

    Gain over $200 dollars in a day. Easy money. You should give us a heads up next time buying anything LOL.

Back to Top