I believe the investors were looking for a positive guidance on the Media Front ( ESPN ). Moreover the three words " some subscriber loss " that were used in the earnings conference call ruined everything for Disney. The investors took it in a wrong way & hence the fall in stock price. Apparently cable makes up 46 percent of Disney's operating income. Disney stock at it's current price will be a terrific buy.
Back in the 1980s I remember reading an article regarding the dogs of the dow. The theory was basically similar.. in any given year, the worst performing 5 dow stocks would be in the top half of performance the following year. It had a lot to do with stock index mutual fund allocations in January, but later just became a self-fulfilling prophecy. In December, people would start determining the 5 worst peforming stocks, and then buy them January, and that extra buy pressure would cause the price to rise, and tadaa.. they are in the top 50% the following year. Wall Street guys are Sheep. You tell them there is a sell-off in August because of fund managers taking vacations.. and sure enough, they will all start selling in August.
