MTNL investors not showing any loss of confidence as it pauses to catch its breath
18 Jan, 201913 min read
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MAHANAGAR TELEPHONE NIGAM underperformed today. It fell by -0.33% to close at 14.9. It's recent 5 day performance has been -4.17%, +4.0%, +1.69%, -2.64% and -0.98%.
MTNL is currently in a bullish trend. The current bullish signal has generated a profit of +1.71% for MTNL's investors in the last three months.
MTNL has been underperforming the NIFTY-50 index in recent time. It showed significant underperformance (compared to the NIFTY-50 index) from 24 Apr, 2017 to 28 Aug, 2018. Over the last 3 years and 1 month, MTNL underperformed the NIFTY-50 index on 58% days.
MTNL returned losses on 62% days in the last three months. During this time, it delivered on average +0.21% per day. It delivered it's best daily return of +19.75%, during this period, on Tuesday, 1 Jan, 2019. The longest stort-term trend during this period was 8 losing days, which started on 19 Nov, 2018 and ended on 29 Nov, 2018. This bearish trend lost -8.25% of investor capital.
During the last year MTNL had 3 profitable months and 9 loss making months. MTNL returned profits in fewer months than NIFTY-50 index. MTNL significantly outperformed NIFTY-50 index in Dec 2018, when it returned +26.56% compared to +6.56% returned by NIFTY-50 index during it's best month in the last one year - Jul 2018. MTNL 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 -45.63%. It is interesting to note that both MTNL and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.
"There are two kinds of investors, be they large or small: those who don't know where the market is headed, and those who don't know that they don't know. Then again, there is a third type of investor -the investment professional, who indeed knows that he or she doesn't know, but whose livelihood depends upon appearing to know.
MTNL 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 surge in MTNL's volatility from 30 Oct, 2018 to 1 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 MTNL has significant negative skewness in it's return distribution. This indicates that MTNL is very risky for short-term investment and can significantly underperform for long durations.
NIFTY-50 index has more chance of extreme outcomes than MTNL. Therefore, NIFTY-50 must receive a lower allocation than MTNL in your portfolio. NIFTY-50 index usually has shorter drawdown period than MTNL.
Based on your interest in MTNL you may find it interesting to know that LTI, CUB and HATSUN are mid caps that have all shown remarkable performance and qualify to be on every investor's watchlist.
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