17.6 -0.34 (-1.95%) Sell

DCW is a falling knife, continues to bleed every investor trying to catch it

13 min read

DCW is a falling knife that can bleed you if you catch it today. On a longer term basis, investors in DCW LTD made +0.03% per day. Friday's performance of -1.95% was a underperformance compared to it's daily average.

[Themes containing DCW]

DCW showed a flat trend over the last 3 months. During this period DCW delivered +0.86% and saw a maximum drawdown of -21.66%. It has been unusually choppy during this period. Long term investors are better off avoiding investing in DCW till volatility reduces and a clear trend emerges.


DCW has been underperforming the NIFTY-50 index in recent time. It showed significant underperformance (compared to the NIFTY-50 index) from 27 Oct, 2017 to 18 Jan, 2019. One must note that DCW is currently at it's worst performance to the NIFTY-50 index which makes it a bad investment candidate. Over the last 3 years and 1 month, DCW underperformed the NIFTY-50 index on 55% days.

DCW returned losses on 59% days in the last three months. During this time, it delivered on average +0.04% per day. It delivered it's worst daily return of -7.6%, during this period, on Friday, 16 Nov, 2018. The longest stort-term trend during this period was 9 losing days, which started on 26 Nov, 2018 and ended on 6 Dec, 2018. This bearish trend lost -12.68% of investor capital.

During the last year DCW had 4 profitable months and 8 loss making months. DCW returned profits in fewer months than NIFTY-50 index. DCW was also a more risky investment than NIFTY-50 index as it's worst month in the last year, Sep 2018, returned -28.27% compared to -6.42% returned by NIFTY-50 index in Sep 2018. DCW had a longer winning streak of losing months than NIFTY-50 index. It went down in 3 straight months (from May 2018 to Jul 2018) during which period it delivered -35.57%. It is interesting to note that both DCW and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

Buy when everyone else is selling and hold until everyone else is buying. That's not just a catchy slogan. It's the very essence of successful investing.
-- J. Paul Getty

DCW 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 DCW's volatility from 22 Oct, 2018 to 17 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 DCW has significant negative skewness in it's return distribution. This indicates that DCW is very risky for short-term investment and can significantly underperform for long durations.

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

Based on your interest in DCW you may find it interesting to know that CUB and NIITTECH have both shown remarkable performance this year and deserve to be on every investors' watchlist.

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