IPAPPM investors looking to cut their losses short
18 Jan, 201913 min read
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INTERNATIONALPAPERAPPMLTD underperformed broader market today. It delivered -0.72% to close at 445.85. During the last week it surged by +0.18% and saw a maximum drawdown of -1.32% before bouncing back.
IPAPPM is currently in a bullish trend. Over the last three months trading long signals has not been a profitable strategy for IPAPPM's investors in general. However, this strategy had significantly lower risk when compared to Buy-and-Hold investing (which returned -6.76%). It is therefore better to tread with caution in the current uptrend by limiting your allocation to IPAPPM.
IPAPPM has been underperforming the NIFTY-50 index in recent time. It showed significant outperformance (compared to the NIFTY-50 index) from 10 Nov, 2017 to 10 Sep, 2018. Over the last 3 years and 1 month, IPAPPM outperformed the NIFTY-50 index on 48% days. Which indicates that on days IPAPPM outperforms the NIFTY-50 index, it's performance is marginally better than on the days it underperforms the NIFTY-50 index.
IPAPPM returned losses on 59% days in the last three months. During this time, it delivered on average -0.08% per day. It delivered it's best daily return of +8.89%, during this period, on Thursday, 1 Nov, 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.
The last 12 months saw IPAPPM's investors making profits in 6 months and incurring losses in 6 months. During the last year, IPAPPM delivered profits in more months than NIFTY-50 index. IPAPPM significantly outperformed NIFTY-50 index in Aug 2018, when it returned +35.57% compared to +6.56% returned by NIFTY-50 index during it's best month in the last one year - Jul 2018. IPAPPM and NIFTY-50 index, both had periods of 2 consecutive profitable months. It is interesting to note that both IPAPPM and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.
There's more honor in investment management than in investment banking.
-- Charlie Munger
IPAPPM 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 IPAPPM's volatility from 2 Nov, 2018 to 18 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 IPAPPM has significant negative skewness in it's return distribution. This indicates that IPAPPM is very risky for short-term investment and can significantly underperform for long durations.
NIFTY-50 index has more chance of extreme outcomes than IPAPPM. Therefore, NIFTY-50 must receive a lower allocation than IPAPPM in your portfolio. NIFTY-50 index usually has shorter drawdown period than IPAPPM.
Based on your interest in IPAPPM you may find it interesting to know that CUB, LTI and LTTS are mid caps that have all shown remarkable performance and qualify to be on every investor's watchlist.
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