584.3 -10.46 (-1.79%) Sell

MCDOWELL-N investors disappointed by market underperformance

13 min read

UNITED SPIRITS LIMITED has destroyed investor wealth today. It returned -1.79% to close at 584.3. During the last week it returned -2.1% and saw a maximum drawdown of -3.3% before bouncing back.

[Themes containing MCDOWELL-N]

Buy-and-Hold investors in MCDOWELL-N experienced a maximum drawdown of -13.1% over the last three months. It gained +10.29% during this strong 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. The net profit from Long signals was +10.23%.


MCDOWELL-N has been underperforming the NIFTY-50 index in recent time, after having outperformed till 26 Feb, 2016. Over the last 3 years and 1 month, MCDOWELL-N underperformed the NIFTY-50 index on 54% days.

MCDOWELL-N returned losses on 54% days in the last three months. During this time, it delivered on average +0.18% per day. It delivered it's best daily return of +7.45%, during this period, on Thursday, 1 Nov, 2018. There was initially a bullish trend during this period which started on 29 Oct, 2018 and went on till 1 Nov, 2018. The bullish trend returned +18.4% to investors. This was followed by a bearish trend that started on 3 Dec, 2018 and ended on 11 Dec, 2018. This bearish trend lost -9.54% of investor capital.

On monthly basis, MCDOWELL-N delivered losses in more months over the last year, than profits. MCDOWELL-N delivered profits less regularly than NIFTY-50 index. MCDOWELL-N was also a more risky investment than NIFTY-50 index as it's worst month in the last year, Sep 2018, returned -18.4% compared to -6.42% returned by NIFTY-50 index in Sep 2018. MCDOWELL-N 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 -17.99%. It is interesting to note that both MCDOWELL-N and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

"The man who begins to speculate in stocks with the intention of making a fortune usually goes broke, whereas the man who trades with a view of getting good interest on his money sometimes gets rich.

MCDOWELL-N 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 MCDOWELL-N's volatility from 1 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 MCDOWELL-N has significant negative skewness in it's return distribution. This indicates that MCDOWELL-N is very risky for short-term investment and can significantly underperform for long durations.

Investors trading in MCDOWELL-N derivatives at this moment can consider 'Long Strangle' options strategy to receive better risk-adjusted returns.

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

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

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