RSWM LIMITED was among the best performers on Tuesday. It returned +2.9% to close at 228.65. On a day when the overall market breadth was 70%, it closed higher than 57% of the market. In comparison, the benchmark NIFTY-50 index closed today at -0.0036%.
RSWM showed a strong up trend over the last 3 months. During this period RSWM returned +15.57% and saw a maximum drawdown of -16.29%. It has been unusually choppy during this period. Long term investors are better off avoiding investing in RSWM till volatility reduces and a clear trend emerges.
During the last three months RSWM was mostly profitable and delivered on average +0.3% per day. It's best return during this period (of +15.39%) was on Monday, 17 Dec, 2018. While it's worst loss in the same period (of -6.43%) was on Thursday, 20 Dec, 2018. There was initially a bearish trend during this period which started on 11 Dec, 2018 and went on till 14 Dec, 2018. The trend delivered -5.51% losses to investors. This was followed by a bullish trend that started on 26 Dec, 2018 and ended on 1 Jan, 2019. This bullish trend delivered +5.99% to investors.
RSWM had 5 profitable and 7 loss making months over the last year. During the last year, number of profitable months of RSWM and NIFTY-50 index were the same. RSWM significantly outperformed NIFTY-50 index in Nov 2018, when it returned +22.12% compared to +6.56% returned by NIFTY-50 index during it's best month in the last one year - Jul 2018. RSWM and NIFTY-50 index, both had periods of 2 consecutive profitable months. It is interesting to note that both RSWM and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.
"Confronted with a challenge to distill the secret of sound investment into three words, we venture the motto, Margin of Safety.
RSWM 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 RSWM's volatility from 24 Oct, 2018 to 9 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 RSWM has significant negative skewness in it's return distribution. This indicates that RSWM is very risky for short-term investment and can significantly underperform for long durations.
NIFTY-50 index has more chance of extreme outcomes than RSWM. Therefore, NIFTY-50 must receive a lower allocation than RSWM in your portfolio. NIFTY-50 index usually has shorter drawdown period than RSWM.
Based on your interest in RSWM you may find it interesting to know that BRITANNIA, BAJFINANCE and HINDUNILVR are large caps that have all shown remarkable performance and qualify to be on every investor's watchlist.
... we have a small favour to ask. Help us bring the power of algorithmic trading strategies to individual investors.
All content in this article was automatically generated by algorithms. This ensures that there are no human biases in the analysis provided. This approach to investing is not new and has been around for more than three decades. Yet, it has been available to only the most affluent or elite investors leaving individual investors to trade on emotions (such as fear and greed), intuition and poor analysis from third-parties. We want to change this.
We want to empower investors with all the tools and analysis required by them to make a rational investment decision.If you found Spotalpha useful, consider making a contribution. For as little as $5 you can support our efforts and it takes less than a minute. Thank you. Contribute