Don't consider buying MONTECARLO now, it is risky at the moment
18 Jan, 201913 min read
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MONTE CARLO FASHIONS LTD. trailed the broader market today. It lost -0.79% to close at 376.1. It's recent 5 day performance has been -0.22%, -0.42%, +0.61%, -0.51% and -0.61%.
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MONTECARLO showed a up trend over the last 3 months. During this period MONTECARLO returned +2.63% and saw a maximum drawdown of -7.42%. There was a long signal during this period which returned +5.03%.
MONTECARLO has been underperforming the NIFTY-50 index in recent time, after having outperformed till 6 Jan, 2016. Over the last 3 years and 1 month, MONTECARLO underperformed the NIFTY-50 index on 53% days.
During the last three months MONTECARLO delivered losses on 54% days. However, it still managed to end this period in a profit. It's best return during this period (of +3.95%) was on Thursday, 29 Nov, 2018. While it's worst loss in the same period (of -2.83%) was on Thursday, 25 Oct, 2018. There was initially a bullish trend during this period which started on 26 Nov, 2018 and went on till 30 Nov, 2018. The bullish trend returned +12.45% to investors. This was followed by a bearish trend that started on 5 Dec, 2018 and ended on 10 Dec, 2018. This bearish trend lost -3.64% of investor capital.
MONTECARLO had 4 profitable and 8 loss making months over the last year. During the last year, MONTECARLO underperformed NIFTY-50 index on monthly return basis. MONTECARLO was also a more risky investment than NIFTY-50 index as it's worst month in the last year, May 2018, returned -13.15% compared to -6.42% returned by NIFTY-50 index in Sep 2018. MONTECARLO and NIFTY-50 index, both had periods of 2 consecutive profitable months. It is interesting to note that both MONTECARLO and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.
"It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.
MONTECARLO 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 MONTECARLO's volatility from 22 Oct, 2018 to 10 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 MONTECARLO has significant negative skewness in it's return distribution. This indicates that MONTECARLO is very risky for short-term investment and can significantly underperform for long durations.
NIFTY-50 index has more chance of extreme outcomes than MONTECARLO. Therefore, NIFTY-50 must receive a lower allocation than MONTECARLO in your portfolio. NIFTY-50 index usually has shorter drawdown period than MONTECARLO.
On a general note (since you are interested in MONTECARLO), SPLIL has performed really well this year and deserves to be closely tracked for investment opportunities.
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