User 283977

Cramer's Lightning Round - Disney's Mouse Might Roar (2/3/09)

OK, lets say DIS is at a bottom… so what? It provides less than a 2% dividend. In this kind of a market the only reason to buy would be anticipated increases in its stock price. Its currently below its support level of around $21 a vicinity where its been since November. There was a lot more then normal volume in this stock today, and the stock dropped by 7.9% to $19. So a larger proportion of that volume was selling.

Where does he expect the stock to go, and by when? There is ZERO evidence of a upward trend in this stock, and Cramer says that the single worst and most common investing mistake is adopting a "buy and hold" strategy:

seekingalpha.com/artic...

That coupled with his recommendation of buy, zero evidence of an upward trend and Disney missing their numbers along with a large volume of sales the day after his recommendation…

If the stock showed evidence of breaking out of its support level, ok, but buy now because its at a low… If it just goes mostly sideways, you end up having your investment capital tied up with a 1.7% dividend zombie stock.