BPL LTD

38.85 -0.69 (-1.77%) Sell

Don't even consider investing in BPL now, it is a high risk investment

13 min read

BPL LTD was among the worst performers on Friday. It fell by -1.77% to close at 38.85. On a day when the overall market breadth was 71%, it closed higher than 81% of the market. In comparison, the benchmark NIFTY-50 index closed today at +0.02%.

[Themes containing BPL]

BPL showed a bearish trend over the last 3 months. During this period BPL fell by -4.55% and saw a maximum drawdown of -17.69%. There was a short signal during this period which returned +4.55%.

Trend

BPL has been underperforming the NIFTY-50 index in recent time. It showed significant underperformance (compared to the NIFTY-50 index) from 20 Dec, 2017 to 9 Oct, 2018. Over the last 3 years and 1 month, BPL underperformed the NIFTY-50 index on 59% days.

During the last three months BPL was mostly loss making and delivered on average -0.04% per day. It's best return during this period (of +6.62%) was on Tuesday, 18 Dec, 2018. While it's worst loss in the same period (of -5.28%) was on Monday, 22 Oct, 2018. The longest stort-term trend during this period was 6 losing days, which started on 3 Dec, 2018 and ended on 10 Dec, 2018. This bearish trend lost -12.43% of investor capital.

During the last year BPL had 4 profitable months and 8 loss making months. BPL returned profits in fewer months than NIFTY-50 index. BPL was also a more risky investment than NIFTY-50 index as it's worst month in the last year, Sep 2018, returned -26.58% compared to -6.42% returned by NIFTY-50 index in Sep 2018. BPL and NIFTY-50 index, both had periods of 2 consecutive losing months. It is interesting to note that both BPL and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

If you totally want to reduce risk, take no risk. Bury the money. Then you've got no risk at all.
-- Don Connelly

BPL is currently seeing overall fall in volatility. In comparison, the NIFTY-50 index is seeing decrease in volatility. During the last three months, there was a significant fall in BPL's volatility from 19 Oct, 2018 to 9 Jan, 2019. While there was a significant fall in the NIFTY-50 index's volatility from 31 Oct, 2018 to 5 Dec, 2018.

Advanced/professional short-term investors should note that BPL has significant negative skewness in it's return distribution. This indicates that BPL is very risky for short-term investment and can significantly underperform for long durations.

NIFTY-50 index has more chance of extreme outcomes than BPL. Therefore, NIFTY-50 must receive a lower allocation than BPL in your portfolio. NIFTY-50 index usually has shorter drawdown period than BPL.

Based on your interest in BPL you may find it interesting to know that NIFTY-GS-15YRPLUS has shown remarkable performance and deserves to be on every investors' watchlist.

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