Don't even consider investing in LYPSAGEMS now, it is a really dangerous investment now

LYPSA GEMS & JEWEL LTD is a falling knife that can bleed you if you catch it today. It fell by -2.3% to close at 8.5. It's recent 5 day performance has been -3.87%, -1.09%, -1.08%, +1.65% and +1.11%.

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LYPSAGEMS showed a strong bearish trend over the last 3 months. During this period LYPSAGEMS fell by -20.56% and saw a maximum drawdown of -41.38%. It has been unusually choppy during this period. Long term investors are better off avoiding investing in LYPSAGEMS till volatility reduces and a clear trend emerges.

Trend

Monthly Performance

Alpha (outperformance)

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Volatility

Return distribution

LYPSAGEMS has been underperforming the NIFTY-50 index in recent time. It showed significant underperformance (compared to the NIFTY-50 index) from 6 Jan, 2016 to 28 Aug, 2018. Over the last 3 years and 1 month, LYPSAGEMS underperformed the NIFTY-50 index on 54% days.

During the last three months LYPSAGEMS was mostly loss making and delivered on average -0.3% per day. It's best return during this period (of +19.15%) was on Friday, 2 Nov, 2018. While it's worst loss in the same period (of -7.93%) was on Tuesday, 6 Nov, 2018. The longest stort-term trend during this period was 13 losing days, which started on 12 Nov, 2018 and ended on 29 Nov, 2018. This bearish trend lost -29.23% of investor capital.

During the last year LYPSAGEMS had 1 profitable months and 11 loss making months. LYPSAGEMS returned profits in fewer months than NIFTY-50 index. LYPSAGEMS was also a more risky investment than NIFTY-50 index as it's worst month in the last year, Mar 2018, returned -38.6% compared to -6.42% returned by NIFTY-50 index in Sep 2018. LYPSAGEMS had a longer winning streak of losing months than NIFTY-50 index. It went down in 5 straight months (from May 2018 to Sep 2018) during which period it delivered -65.54%. It is interesting to note that both LYPSAGEMS and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

All intelligent investing is value investing - acquiring more than you are paying for. You must value the business in order to value the stock .
-- Charles Thomas Munger

LYPSAGEMS 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 LYPSAGEMS's volatility from 2 Nov, 2018 to 28 Nov, 2018. 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 LYPSAGEMS has significant negative skewness in it's return distribution. This indicates that LYPSAGEMS is very risky for short-term investment and can significantly underperform for long durations.

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

On a general note (since you are interested in LYPSAGEMS), if you are evaluating LYPSAGEMS as an investment candidate, then you should read about JUSTDIAL which has delivered similar performance and can help diversify your portfolio.