GSPL continues to mint money for it's investors
18 Jan, 201915 min read
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GUJARAT STATE PETRO LTD delivered stellar performance today. It gained +2.64% to close at 182.45. It's recent 5 day performance has been -0.08%, +4.74%, -0.12%, -0.79% and +0.79%.
GSPL showed a up trend over the last 3 months. During this period GSPL gained +8.83% and saw a maximum drawdown of -10.01%. It has been unusually choppy during this period. Long term investors are better off avoiding investing in GSPL till volatility reduces and a clear trend emerges.
GSPL has been outperforming the NIFTY-50 index in recent time. Over the last 3 years and 1 month, GSPL underperformed the NIFTY-50 index on 51% days.
GSPL was profitable on 53% days in the last three months. During this time, it delivered on average +0.15% per day. It delivered it's best daily return of +4.74%, during this period, on Wednesday, 16 Jan, 2019. There was initially a bullish trend during this period which started on 26 Oct, 2018 and went on till 9 Nov, 2018. The bullish trend returned +12.29% to investors. This was followed by a bearish trend that started on 6 Dec, 2018 and ended on 10 Dec, 2018. This bearish trend lost -4.71% of investor capital.
GSPL had 6 profitable and 6 loss making months over the last year. GSPL was profitable in more months than NIFTY-50 index. GSPL significantly outperformed NIFTY-50 index in Jul 2018, when it returned +10.01% compared to +6.56% returned by NIFTY-50 index during it's best month in the last one year - Jul 2018. GSPL had a longer winning streak of profitable months than NIFTY-50 index. It went up in 3 straight months (from May 2018 to Jul 2018) during which period it delivered +10.86%. It is interesting to note that both GSPL and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.
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GSPL is becoming more 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 GSPL's volatility from 31 Oct, 2018 to 2 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 GSPL has significant negative skewness in it's return distribution. This indicates that GSPL is very risky for short-term investment and can significantly underperform for long durations.
GSPL has more chance of extreme outcomes than the NIFTY-50 index. Therefore, GSPL must receive a lower allocation than NIFTY-50 in your portfolio. NIFTY-50 index usually has shorter drawdown period than GSPL.
On a general note (since you are interested in GSPL), if you are evaluating GSPL as an investment candidate, then you should read about L&TFH which has delivered similar performance and can help diversify your portfolio.
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