MANGLMCEM investors herd to book profits while the going is good
18 Jan, 201914 min read
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MANGALAM CEMENT LTD is a falling knife that can bleed you if you catch it on Friday. It lost -2.27% to close at 221.5. It is currently trading -51% below it's 52 week high of 452.65.
MANGLMCEM showed a up trend over the last 3 months. During this period MANGLMCEM gained +2.19% and saw a maximum drawdown of -11.61%. It has been unusually choppy during this period. Long term investors are better off avoiding investing in MANGLMCEM till volatility reduces and a clear trend emerges.
MANGLMCEM has been underperforming the NIFTY-50 index in recent time, after having outperformed till 16 Jan, 2018. Over the last 3 years and 1 month, MANGLMCEM underperformed the NIFTY-50 index on 55% days.
MANGLMCEM returned losses on 59% days in the last three months. During this time, it delivered on average +0.06% per day. It delivered it's best daily return of +5.84%, during this period, on Tuesday, 4 Dec, 2018. There was initially a bearish trend during this period which started on 6 Dec, 2018 and went on till 14 Dec, 2018. The trend delivered -11.21% losses to investors. This was followed by a bullish trend that started on 27 Dec, 2018 and ended on 1 Jan, 2019. This bullish trend delivered +10.68% to investors.
MANGLMCEM had 3 profitable and 9 loss making months over the last year. During the last year, MANGLMCEM underperformed NIFTY-50 index on monthly return basis. MANGLMCEM was also a more risky investment than NIFTY-50 index as it's worst month in the last year, Feb 2018, returned -20.7% compared to -6.42% returned by NIFTY-50 index in Sep 2018. MANGLMCEM 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 -55.43%. It is interesting to note that both MANGLMCEM and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.
"You will never be a greater risk-taker in the markets if you approach life with a completely different attitude.
MANGLMCEM 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 surge in MANGLMCEM's volatility from 9 Nov, 2018 to 20 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 MANGLMCEM has significant negative skewness in it's return distribution. This indicates that MANGLMCEM is very risky for short-term investment and can significantly underperform for long durations.
MANGLMCEM has more chance of extreme outcomes than the NIFTY-50 index. Therefore, MANGLMCEM must receive a lower allocation than NIFTY-50 in your portfolio. NIFTY-50 index usually has shorter drawdown period than MANGLMCEM.
On a general note (since you are interested in MANGLMCEM), two instruments that have delivered similar performance as MANGLMCEM are NFL and SOBHA. They are suitable as good alternative investment candidates that can diversify your portfolio.
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