104.2 -5.13 (-4.93%) Buy

ITI investors herd to book profits while the going is good

13 min read

ITI has destroyed investor wealth today. On a longer term basis, investors in ITI LTD made +0.18% per day. Friday's performance of -4.93% was a underperformance compared to it's daily average.

[Themes containing ITI]

ITI showed a strong bullish trend over the last 3 months. During this period ITI surged by +29.93% and saw a maximum drawdown of -14.78%. There was a long signal during this period which returned +17.67%.


ITI has been outperforming the NIFTY-50 index in recent time. It showed significant outperformance (compared to the NIFTY-50 index) from 6 Oct, 2016 to 26 Oct, 2017. Over the last 3 years and 1 month, ITI outperformed the NIFTY-50 index on 42% days. Which indicates that on days ITI outperforms the NIFTY-50 index, it's performance is marginally better than on the days it underperforms the NIFTY-50 index.

ITI returned losses on 61% days in the last three months. During this time, it delivered on average +0.49% per day. It delivered it's best daily return of +18.31%, during this period, on Wednesday, 16 Jan, 2019. The longest stort-term trend during this period was 5 losing days, which started on 22 Oct, 2018 and ended on 26 Oct, 2018. This bearish trend lost -8.5% of investor capital.

The last 12 months saw ITI's investors making profits in 5 months and incurring losses in 7 months. During the last year, ITI and NIFTY-50 index had the same number of profitable months. ITI was also a more risky investment than NIFTY-50 index as it's worst month in the last year, Sep 2018, returned -29.1% compared to -6.42% returned by NIFTY-50 index in Sep 2018. ITI and NIFTY-50 index, both had periods of 2 consecutive profitable months. It is interesting to note that both ITI and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

"It is remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid, instead of trying to be very intelligent.

ITI is currently seeing overall increase in volatility. In comparison, the NIFTY-50 index is seeing decrease in volatility. During the last three months, there was a significant fall in ITI's volatility from 22 Oct, 2018 to 14 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 ITI has significant negative skewness in it's return distribution. This indicates that ITI is very risky for short-term investment and can significantly underperform for long durations.

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

Based on your interest in ITI you may find it interesting to know that RESPONIND and ASTRAZEN are both small caps that have shown remarkable performance and deserve to be on every investors' watchlist.

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