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

JBM AUTO LIMITED is a falling knife that can bleed you if you catch it on Wednesday. It returned -1.21% to close at 276.5. On a day when the overall market breadth was 70%, it closed higher than 81% of the market. In comparison, the benchmark NIFTY-50 index closed today at -0.0084%.

[Themes containing JBMA]

Buy-and-Hold investors in JBMA experienced a maximum drawdown of -12.39% over the last three months. It returned +4.03% during this up trending period. There were both Long and Short signals during this period, while the long signals were significantly more profitable than the short signals.

Trend

Monthly Performance

Alpha (outperformance)

Heatmap

Volatility

Return distribution

JBMA has been underperforming the NIFTY-50 index in recent time, after having outperformed till 18 Sep, 2017. Over the last 3 years and 1 month, JBMA outperformed the NIFTY-50 index on 42% days. Which indicates that on days JBMA outperforms the NIFTY-50 index, it's performance is marginally better than on the days it underperforms the NIFTY-50 index.

During the last three months JBMA delivered losses on 58% days. However, it still managed to end this period in a profit. It's best return during this period (of +6.85%) was on Monday, 5 Nov, 2018. While it's worst loss in the same period (of -4.88%) was on Wednesday, 14 Nov, 2018. There was initially a bullish trend during this period which started on 29 Oct, 2018 and went on till 5 Nov, 2018. The bullish trend returned +19.67% to investors. This was followed by a bearish trend that started on 7 Jan, 2019 and ended on 14 Jan, 2019. This bearish trend lost -6.76% of investor capital.

On monthly basis, JBMA delivered losses in more months over the last year, than profits. JBMA delivered profits less regularly than NIFTY-50 index. JBMA was also a more risky investment than NIFTY-50 index as it's worst month in the last year, Jun 2018, returned -22.62% compared to -6.42% returned by NIFTY-50 index in Sep 2018. JBMA had a longer winning streak of losing months than NIFTY-50 index. It went down in 5 straight months (from Feb 2018 to Jun 2018) during which period it delivered -55.87%. It is interesting to note that both JBMA and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

I think that stocks have been this tremendous, tremendous equalizer for people in this country. Guys who can't make a lot of money at their jobs have been able to make a lot of money in the stock market.
-- Jim Cramer

JBMA 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 JBMA's volatility from 5 Nov, 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 JBMA has significant negative skewness in it's return distribution. This indicates that JBMA is very risky for short-term investment and can significantly underperform for long durations.

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

On a general note (since you are interested in JBMA), BRITANNIA is a large cap that deserves to be closely tracked for investment opportunities.