Prayers for PREMIER investors as it ranked among the worst performers
14 Dec, 201813 min read
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PREMIER LIMITED is a falling knife that can bleed you if you catch it on Friday. It delivered -5.77% to close at 7.35. It is currently trading -80% below it's 52 week high of 36.9.
Buy-and-Hold investors in PREMIER experienced a maximum drawdown of -56.02% over the last three months. It delivered -55.72% during this strong bearish trending period. There were both Long and Short signals during this period, where the short signals were significantly more profitable than the long signals. The net profit from Short signals was +50.6%.
PREMIER has been underperforming the NIFTY-50 index in recent time. It showed significant underperformance (compared to the NIFTY-50 index) from 11 Jan, 2016 to 3 Dec, 2018. Over the last 2 years 11 months and 13 days, PREMIER underperformed the NIFTY-50 index on 56% days.
During the last three months PREMIER was mostly loss making and delivered on average -1.26% per day. It's best return during this period (of +8.55%) was on Wednesday, 24 Oct, 2018. While it's worst loss in the same period (of -9.6%) was on Friday, 28 Sep, 2018. The longest stort-term trend during this period was 5 losing days, which started on 4 Oct, 2018 and ended on 10 Oct, 2018. This bearish trend lost -17.81% of investor capital.
The last 12 months saw PREMIER's investors making profits in 3 months and incurring losses in 9 months. PREMIER was less consistent in delivering monthly returs than NIFTY-50 index. PREMIER was also a more risky investment than NIFTY-50 index as it's worst month in the last year, Mar 2018, returned -34.54% compared to -6.42% returned by NIFTY-50 index in Sep 2018. PREMIER 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 -89.11%. It is interesting to note that both PREMIER and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.
Money is only a tool. It will take you wherever you wish, but it will not replace you as the driver.
-- Ayn Rand
PREMIER is currently seeing overall increase in volatility. In comparison, the NIFTY-50 index is seeing decrease in volatility. While there was a significant fall in the NIFTY-50 index's volatility from 21 Sep, 2018 to 5 Dec, 2018.
Advanced/professional short-term investors should note that PREMIER has significant negative skewness in it's return distribution. This indicates that PREMIER is very risky for short-term investment and can significantly underperform for long durations.
NIFTY-50 index has more chance of extreme outcomes than PREMIER. Therefore, NIFTY-50 must receive a lower allocation than PREMIER in your portfolio. NIFTY-50 index usually has shorter drawdown period than PREMIER.
Based on your interest in PREMIER you may find it interesting to know that BAJFINANCE and ~CHEMICALS have both shown remarkable performance and deserve to be on every investors' watchlist.
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