Want to invest in MAGNUM? Consider as it delivered good returns

MAGNUM VENTURES LTD. delivered good returns on Tuesday. It grew by +0.77% to close at 6.55. On a day when the overall market breadth was 70%, it closed higher than 82% of the market. In comparison, the benchmark NIFTY-50 index closed today at -0.0036%.

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MAGNUM showed a strong up trend over the last 3 months. During this period MAGNUM grew by +28.43% and saw a maximum drawdown of -7.8%. It has been unusually choppy during this period. Long term investors are better off avoiding investing in MAGNUM till volatility reduces and a clear trend emerges.

Trend

Monthly Performance

Alpha (outperformance)

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Volatility

Return distribution

MAGNUM has been underperforming the NIFTY-50 index in recent time, after having outperformed till 13 Jul, 2017. Over the last 3 years and 1 month, MAGNUM outperformed the NIFTY-50 index on 48% days. Which indicates that on days MAGNUM 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 MAGNUM delivered losses on 53% days. However, it still managed to end this period in a profit. It's best return during this period (of +8.47%) was on Friday, 7 Dec, 2018. While it's worst loss in the same period (of -7.8%) was on Monday, 21 Jan, 2019. There was initially a bearish trend during this period which started on 28 Nov, 2018 and went on till 30 Nov, 2018. The trend delivered -4.25% losses to investors. This was followed by a bullish trend that started on 19 Dec, 2018 and ended on 27 Dec, 2018. This bullish trend delivered +11.94% to investors.

On monthly basis, MAGNUM delivered losses in more months over the last year, than profits. MAGNUM delivered profits less regularly than NIFTY-50 index. MAGNUM was also a more risky investment than NIFTY-50 index as it's worst month in the last year, Mar 2018, returned -25.77% compared to -6.42% returned by NIFTY-50 index in Sep 2018. MAGNUM had a longer winning streak of losing months than NIFTY-50 index. It went down in 3 straight months (from May 2018 to Jul 2018) during which period it delivered -46.25%. It is interesting to note that both MAGNUM and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

Financial security and independence are like a three-legged stool resting on savings, insurance and investments.
-- Brian Tracy

MAGNUM is becoming more 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 MAGNUM's volatility from 23 Oct, 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 MAGNUM has negative skewness in it's return distribution. This indicates that investors may need to stay invested through long periods of drawdown before expecting a recovery.

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

Based on your interest in MAGNUM you may find it interesting to know that HATSUN, RESPONIND and VINATIORGA have all shown remarkable performance this year and deserve to be on every investor's watchlist.