................................

[PamOKW]

Okay, did the quick search.

In a ten-year period, DIS split 4:1 on 5/18/92 and 3:1 on 7/10/98.

GE split 2:1 on 5/16/94, 2:1 on 5/12/97 and 3:1 on 5/8/00

So, for the last 10 years, each DIS share is now 12 shares and each GE share is now 12 share! How's that for coincidence.

 

[All Aboard]

Bstanley, Pam is definitely using apples to apples and considering splits.

Disney's adjusted closing price is right where it was in early 1994 - more than 8 years ago (when was it that Frank Wells passed away?). During that 8 year timeframe, the stock grew but has since lost all those gains. Are we at a price trough right now? Who knows. The market is so tenuous right now that snippets of bad or good news swing things wildly.

For Disney, they've reacted to softening trends with massive cost controls. That short term fix may have prevented even deeper price losses than they have experienced. But, what has it done to help them maintain some of their core customers?

Are the decisions to heavily cut back Imagineers, severly reduce feature animation and make significant cutbacks at the theme parks solid long-term strategies? Does Disney benefit from becoming a straight to video sequal clearing house? Do the losses from the failing network, the black hole money pit internet portal and the decision for drop $5 billion on the ABC Family Channel give you warm and fuzzies about the direction that current management is taking this company?

We can discuss dollar cost averaging and market trends all day long when we are talking about a diversified mutual fund. But, when discussing investment decisions about a single stock, all the questions in the previous paragraph are what are important.

 

[Bstanley]

In this case the source of the data was adjusted for the split(s), and the stocks themselves actually split the same. But nonetheless I felt compelled to point out that it needed to be considered, just call me finicky... ;-)

You should always be prudent when buying stock - but just because a company is down doesn't mean it's stock might not be a good buy. Often those stocks have the best opportunity for increasing.

The quote that someone was searchng for earlier is - "Buy on the rumor, sell on the news".

When the rumor that the Big ME is going to 'pursue other interests' gets so loud that you can't hear anything else, you might want to take a roll of the dice and see what comes up. As was pointed out earlier - don't gamble with money you can't afford to lose...

 

[PamOKW]

BStanely -- I'm with you. You always hear about the folks who bought a stock when it was low during a tough time like now and then sold it for the big bucks when it came back up. Of course, you have to know when it's time to cash it in. (and which stock to buy). But, people need to keep you last line

don't gamble with money you can't afford to lose...

in mind as well. Because buying just because it's low is a gamble that it'll come up and you'll know when to sell.

Gcurling -- Thanks for the confirmation I was doing this correctly. I was starting to doubt myself. As I said, I only know "a little".

 

[manning]

PamOKW, you're doing ok!!

 

[Bob O]

When i think of the future of disney i think the future is not rosy because of the current management team which has caused problems for the company by the purchases they made ie abc/fox family channel and still pending lawsuits ie pooh as examles. Also the next management team wont have the luxury that eisner/wells had in that they had a vault of old disney movies that could be released every 5-10 yrs for more money. Also a untapped resource in all the vacant land at wdw that could be developed and become a revenuw source/also the admission price for wdw could easily be increased for more money and these things wont exist when their is a change in management. They have done little to restock the vault for easy revenue for the next regime.
I think when the managment change is made they will have to create more product to make money and not be able to mine the old products and with the amount of people who have left the different divisons be it movie/imaginerring etc it will take a while to regain their old creativity.

 

[manning]

That's why you don't try to time the market. There is someone on one of the oil company boards. He was proud that he sold on a high and was waiting for the low to buy in. The low was upper 30's. It's now around 44. He missed the timing. That's why you dollar cost average.

Here is a quote from an article from Kiplinger.com

"The sad fact is, virtually no one has ever been able to time the stock market well enough and consistently enough to outperform long-term holding. Says John Markese, president of the American Association of Individual Investors: “Good timing can’t be beat.” The problem is, “It just can’t be done.”"


Warren Buffet is worth 35 Billion dollars. He mainly buys and holds. A study was done to determine what he would be worth if he tried to time the market. He would have been worth only 5 Billion dollars. By the way, he bailed out of Disney before the Bass Bros did.

 

[TiggerFreak]

What the Bass family did was not "Bailing."

 

[Bob O]

I would agree dollar coast averaging is best for the average investor. But there are some who have done well w/timing the market and im sure that studies could be done where Warren Buffet successfully timed the market and could be worth more. Studies can always sya what you want them to, they are easy to be rigged to get the desired result.

 

[manning]

Some, like a very few if any, when they where lucky. Buffet, the best of the best stays away from it.

Refer to a study at http://www.towneley.com/star.pl5?page=study

In short it finds that between 1962 and 1993 95% of the market gains stemmed from the best 1.2 % of the trading days. That's 90 trading days out of 7,802 trading days.

The annual rate of gain was 11.83%

the annual rate of gain was 3.28% if the 90 days were missed.

Timing the market perfectly would yield very attractive returns. However the study concludes that it is virtually unreachable. If a market timer is right 50% of the time, the probability of executing a perfectly timed investment strategy is 0.5 raised to the 816th power -- or nearly zero.

I think I'll go out and buy $50,000 dollars of lottery tickets.

 

[Galahad]

Am also a Disney shareholder. Bought more after the fall after 9/11 and more last week when it hovered around 15. The P/E ratios for it have not been this good in a long time (though they could be better). And, like others, it is a buy-and-hold investment. My time horizon for that investment is at least 15 years. If you have a long horizon like that then I think it's a good buy.

 

[J&D]

You can purchase just one share of Disney stock at oneshare.com.
Mousesavers has codes for $ off purchase.

 

[manning]

Stock closed at 14.27. Moody along with Standard and Poors thinking of cutting long term credit rating.

(Rueters) Moody's expressed concern over Disney's theme park operations, viewership and advertising levels at the ABC networks, and Disney's $15 billion debt load. It said waning consumer confidence and geopolitical risks will "challenge" Disney to hold onto its current long-term ratings.

 

[PamOKW]

Manning -- I was just coming to say that Disney has gotten even more "inexpensive" today. I sure hope they kick something into gear to turn this around.

 

[raidermatt]

Take this for what its worth, as its just one person's opinion...

If you don't know a lot about investing in individual stocks, and are looking for a "buy and hold" long term investment, its probably best to get into a mutual fund or two.

The simple fact is, nobody knows if Disney (or any other company) will really provide good returns, even if your horizon is 5+ years. It has under-performed vs. the Dow and the S&P 500 for almost 4 years now. For at least the 6 years before that, it only matched the Dow and S&P.

 

[All Aboard]

That's a near 7% drop in price today, translating to a market cap of under $30billion. That puts the debt-equity ratio at 1:2.

 

[raidermatt]

I could be wrong, but I think the initial review was driven by the debt to earnings ration rising. (as a result of lowered earnings expectations in the 4th Q.)

Of course, that has driven the stock price down further, lowering the market cap.

 

[manning]

Radermatt, if you can try to but those mutual funds into a Roth IRA. If you don't have to take out the earnings you by age 59 1/2 or five years, whichever comes first, you will never have to pay taxes. You can take out the money you deposit any time because it is already taxed.

Also if you are in mutual funds that are not in IRA's you may want to look for ones that don't trade very much. As funds buy and sell you have to pay taxes on any profits, even if you don't take any money out.

 

[Galahad]

I agree about buying and holding mutual funds. That's our invenstment of choice too. But we do own a couple of stocks outright and one of them is DIS. Again, since my horizon is far off, I'd still be a DIS buyer right now.

 

[raidermatt]

Good tips, manning... Thanks...