BOMBAY RAYON FASHIONS LTD

8.95 -0.1 (-1.1%) Sell

BRFL investors treading cautiously as performance is muted

13 min read

BOMBAY RAYON FASHIONS LTD trailed the broader market today. It lost -1.1% to close at 8.95. During the last week it lost -2.72% and saw a maximum drawdown of -2.72%.

[Themes containing BRFL]

Buy-and-Hold investors in BRFL experienced a maximum drawdown of -50.29% over the last three months. It lost -47.66% during this strong down trending period. There were both Long and Short signals during this period, where the short signals were significantly more profitable than the long signals. The net profit from Short signals was +42.44%.

Trend

BRFL has been underperforming the NIFTY-50 index in recent time, after having outperformed till 5 Jan, 2016. Over the last 3 years and 1 month, BRFL underperformed the NIFTY-50 index on 56% days.

During the last three months BRFL was mostly loss making and delivered on average -0.96% per day. It's best return during this period (of +4.85%) was on Thursday, 13 Dec, 2018. While it's worst loss in the same period (of -5.0%) was on Wednesday, 21 Nov, 2018. There was initially a bullish trend during this period which started on 31 Oct, 2018 and went on till 9 Nov, 2018. The bullish trend returned +25.62% to investors. This was followed by a bearish trend that started on 19 Nov, 2018 and ended on 5 Dec, 2018. This bearish trend lost -42.73% of investor capital.

BRFL had 3 profitable and 9 loss making months over the last year. During the last year, BRFL underperformed NIFTY-50 index on monthly return basis. BRFL was also a more risky investment than NIFTY-50 index as it's worst month in the last year, Apr 2018, returned -43.22% compared to -6.42% returned by NIFTY-50 index in Sep 2018. BRFL had a longer winning streak of losing months than NIFTY-50 index. It went down in 4 straight months (from Feb 2018 to May 2018) during which period it delivered -96.01%.

All intelligent investing is value investing - acquiring more than you are paying for. You must value the business in order to value the stock .
-- Charles Thomas Munger

BRFL is becoming less volatile overall. In comparison, the NIFTY-50 index is seeing a fall in volatility. During the last three months, there was a significant fall in BRFL's volatility from 19 Oct, 2018 to 13 Dec, 2018. 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 BRFL has significant negative skewness in it's return distribution. This indicates that BRFL is very risky for short-term investment and can significantly underperform for long durations.

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

On a general note (since you are interested in BRFL), two large cap instruments that deserve special mention are BAJFINANCE and INFY. They have significantly outperformed the overall market.

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