MAHLIFE investors take a moment to reassess their portfolio allocation
18 Jan, 201913 min read
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MAHINDRA LIFESPACE DEVLTD delivered lacklustre performance on Friday. It delivered -0.01% to close at 392.85. It is currently trading -38% below it's 52 week high of 636.6.
Buy-and-Hold investors in MAHLIFE experienced a maximum drawdown of -12.49% over the last three months. It delivered -8.28% during this bearish trending period. There were no long signals during this period, where the short signal generated good profits of +8.28% for investors.
MAHLIFE has been underperforming the NIFTY-50 index in recent time. It showed significant underperformance (compared to the NIFTY-50 index) from 23 Feb, 2016 to 16 Jan, 2019. Over the last 3 years and 1 month, MAHLIFE underperformed the NIFTY-50 index on 55% days.
During the last three months MAHLIFE was mostly loss making and delivered on average -0.13% per day. It's best return during this period (of +4.67%) was on Thursday, 27 Dec, 2018. While it's worst loss in the same period (of -3.38%) was on Thursday, 6 Dec, 2018. The longest stort-term trend during this period was 5 losing days, which started on 7 Jan, 2019 and ended on 11 Jan, 2019. This bearish trend lost -3.55% of investor capital.
The last 12 months saw MAHLIFE's investors making profits in 4 months and incurring losses in 8 months. MAHLIFE was less consistent in delivering monthly returs than NIFTY-50 index. MAHLIFE significantly outperformed NIFTY-50 index in May 2018, when it returned +17.28% compared to +6.56% returned by NIFTY-50 index during it's best month in the last one year - Jul 2018. MAHLIFE had a longer winning streak of losing months than NIFTY-50 index. It went down in 6 straight months (from Jul 2018 to Dec 2018) during which period it delivered -32.47%. It is interesting to note that both MAHLIFE and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.
My old father used to have a saying: If you make a bad bargain, hug it all the tighter.
-- Abraham Lincoln
MAHLIFE 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 MAHLIFE's volatility from 23 Oct, 2018 to 4 Dec, 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 MAHLIFE has significant negative skewness in it's return distribution. This indicates that MAHLIFE is very risky for short-term investment and can significantly underperform for long durations.
NIFTY-50 index has more chance of extreme outcomes than MAHLIFE. Therefore, NIFTY-50 must receive a lower allocation than MAHLIFE in your portfolio. NIFTY-50 index usually has shorter drawdown period than MAHLIFE.
Based on your interest in MAHLIFE you may find it interesting to know that TCS, BAJFINANCE and TORNTPHARM are large caps that have all shown remarkable performance and qualify to be on every investor's watchlist.
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