Disney stocks took a tumble, like everyone else, this past few days. It is now at its lowest that I've ever seen ever since I bought into Disney stocks a couple of years ago. This all comes because the stock has been downgraded due to pessimism on the economy and how much people will spend on Disney stuff.
"Rising unemployment will be the straw that breaks the camel's back," Reif Cohen writes. "We are hard pressed to believe that attendance will not fall in (fiscal) 2009 -- people who don't have jobs simply do not go to Disney World."
Together with advertising and consumer products, roughly 60% of Disney's revenue is susceptible to an economic downturn, Reif Cohen says. Disney's earnings could even fall next fiscal year, despite the strength of the studio's slate over the next two years.
Of course, such forecast doesn't bode well for Disney stocks, which is the main reason why it tumbled. However, let's look at in two different ways, shall we?
1. These financial analysts have made such forecast before and they haven't been right so far. What makes this one any different?
2. The current price for Disney stocks is a STEAL! While it has caused the value of our Disney stocks to drop, it also means that this is the opportunity to buy more! Fundamentally, the company is very sound, and with the slate of Disney/Pixar movies coming up in the next couple of years, even a down 2009 would be an opportunity to invest even more stocks into the company. I may be overly optimistic, but I don't see any problem at all in the overall direction of the company.
Zz.
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