INDOTHAI investors disappointed by market underperformance

INDO THAI SEC LTD was among the worst performers on Friday. It returned -3.88% to close at 33.45. On a day when the overall market breadth was 71%, it closed higher than 86% of the market. In comparison, the benchmark NIFTY-50 index closed today at +0.02%.

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INDOTHAI is currently in a down trend. The current bearish signal has generated a profit of +15.1% for investors in the last three months.

Trend

Monthly Performance

Alpha (outperformance)

Heatmap

Volatility

Return distribution

INDOTHAI has been underperforming the NIFTY-50 index in recent time, after having outperformed till 18 Jan, 2018. Over the last 3 years and 1 month, INDOTHAI outperformed the NIFTY-50 index on 44% days. Which indicates that on days INDOTHAI outperforms the NIFTY-50 index, it's performance is marginally better than on the days it underperforms the NIFTY-50 index.

INDOTHAI returned losses on 57% days in the last three months. During this time, it delivered on average -0.23% per day. It delivered it's worst daily return of -7.94%, during this period, on Thursday, 15 Nov, 2018. There was initially a bearish trend during this period which started on 15 Nov, 2018 and went on till 20 Nov, 2018. The trend delivered -11.96% losses to investors. This was followed by a bullish trend that started on 14 Jan, 2019 and ended on 17 Jan, 2019. This bullish trend delivered +2.93% to investors.

On monthly basis, INDOTHAI delivered losses in more months over the last year, than profits. INDOTHAI delivered profits less regularly than NIFTY-50 index. INDOTHAI was also a more risky investment than NIFTY-50 index as it's worst month in the last year, Jun 2018, returned -25.0% compared to -6.42% returned by NIFTY-50 index in Sep 2018. INDOTHAI had a longer winning streak of losing months than NIFTY-50 index. It went down in 6 straight months (from Aug 2018 to Jan 2019) during which period it delivered -45.57%. It is interesting to note that both INDOTHAI and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

Stock market bubbles don't grow out of thin air. They have a solid basis in reality, but reality as distorted by a misconception.
-- George Soros

INDOTHAI 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 INDOTHAI's volatility from 22 Oct, 2018 to 16 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 INDOTHAI has significant negative skewness in it's return distribution. This indicates that INDOTHAI is very risky for short-term investment and can significantly underperform for long durations.

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

On a general note (since you are interested in INDOTHAI), two small cap instruments that deserve special mention are VINATIORGA and IGARASHI. They have significantly outperformed the overall market.