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Disney Stock Soars to New Highs

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Written by Staff
Updated 2/1/2021 2 min read

The Walt Disney Company (NYSE: DIS) stock is flying today. The price is up more than 14% at writing compared to the S&P 500, which is down about 0.5%.

The current share price is near $177 per share, which gives the company a market cap valuation of $320 billion.

While the COVID-19 pandemic has caused Disney’s theme parks to shutter, its streaming service has blown expectations out of the water.

The company reported that it currently has about 87 million subscribers. It’s projected that number could continue to climb as high as 260 million by 2024.

Streaming powerhouse Netflix, Inc. (NASDAQ: NFLX) reported 195 million subscribers in the third quarter of 2020.

Netflix has warned investors that the exponential growth it experienced during the pandemic will likely level off once society returns to normal.

But Disney has multiple streams of revenue. Once the pandemic is over, its theme parks can reopen. And it still plans to release big box-office movies to theaters. New Star Wars, Marvel, Pixel, and Disney movies are slated for release in the coming months and years.

Disney is also the parent company of streaming services Hulu and ESPN+, the broadcast TV channel ABC, along with a slew of cable channels.

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* Results are not typical and will vary from person to person. Making money trading stocks takes time, dedication, and hard work. There are inherent risks involved with investing in the stock market, including the loss of your investment. Past performance in the market is not indicative of future results. Any investment is at your own risk. See Terms of Service here

The available research on day trading suggests that most active traders lose money. Fees and overtrading are major contributors to these losses.

A 2000 study called “Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors” evaluated 66,465 U.S. households that held stocks from 1991 to 1996. The households that traded most averaged an 11.4% annual return during a period where the overall market gained 17.9%. These lower returns were attributed to overconfidence.

A 2014 paper (revised 2019) titled “Learning Fast or Slow?” analyzed the complete transaction history of the Taiwan Stock Exchange between 1992 and 2006. It looked at the ongoing performance of day traders in this sample, and found that 97% of day traders can expect to lose money from trading, and more than 90% of all day trading volume can be traced to investors who predictably lose money. Additionally, it tied the behavior of gamblers and drivers who get more speeding tickets to overtrading, and cited studies showing that legalized gambling has an inverse effect on trading volume.

A 2019 research study (revised 2020) called “Day Trading for a Living?” observed 19,646 Brazilian futures contract traders who started day trading from 2013 to 2015, and recorded two years of their trading activity. The study authors found that 97% of traders with more than 300 days actively trading lost money, and only 1.1% earned more than the Brazilian minimum wage ($16 USD per day). They hypothesized that the greater returns shown in previous studies did not differentiate between frequent day traders and those who traded rarely, and that more frequent trading activity decreases the chance of profitability.

These studies show the wide variance of the available data on day trading profitability. One thing that seems clear from the research is that most day traders lose money .

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Citations for Disclaimer

Barber, Brad M. and Odean, Terrance, Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors. Available at SSRN: “Day Trading for a Living?”

Barber, Brad M. and Lee, Yi-Tsung and Liu, Yu-Jane and Odean, Terrance and Zhang, Ke, Learning Fast or Slow? (May 28, 2019). Forthcoming: Review of Asset Pricing Studies, Available at SSRN: “https://ssrn.com/abstract=2535636”

Chague, Fernando and De-Losso, Rodrigo and Giovannetti, Bruno, Day Trading for a Living? (June 11, 2020). Available at SSRN: “https://ssrn.com/abstract=3423101”