Search for alternative investments is on for SFL investors as it underperforms broader market
22 Jan, 201913 min read
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SHEELA FOAM LIMITED ranked worse than it's peers on Tuesday. It fell by -1.4% to close at 1271.75 which is it's 52 week low, down -27% from it's 52 week high.
SFL is currently in a bearish trend. The current bearish signal has generated a profit of +15.45% for investors in the last three months.
SFL has been underperforming the NIFTY-50 index in recent time. It showed significant outperformance (compared to the NIFTY-50 index) from 25 Jan, 2017 to 30 Nov, 2017. Over the last 2 years 1 month and 13 day, SFL underperformed the NIFTY-50 index on 52% days.
During the last three months SFL was mostly loss making and delivered on average -0.25% per day. It's best return during this period (of +3.48%) was on Friday, 2 Nov, 2018. While it's worst loss in the same period (of -7.22%) was on Tuesday, 6 Nov, 2018. The longest stort-term trend during this period was 7 losing days, which started on 9 Jan, 2019 and ended on 17 Jan, 2019. This bearish trend lost -7.75% of investor capital.
During the last year SFL had 5 profitable months and 7 loss making months. Profitable number of months of SFL and NIFTY-50 index were the same. SFL was also a more risky investment than NIFTY-50 index as it's worst month in the last year, Jan 2019, returned -13.89% compared to -6.42% returned by NIFTY-50 index in Sep 2018. SFL had a longer winning streak of profitable months than NIFTY-50 index. It went up in 4 straight months (from Jun 2018 to Sep 2018) during which period it delivered +17.48%.
"The road to economic well-being is to reward productive economic activity and to provide a moderate and predictable growth of money to finance real economic growth without reigniting the fires of inflation.
SFL 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 fall in SFL's volatility from 25 Oct, 2018 to 2 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 SFL has significant negative skewness in it's return distribution. This indicates that SFL is very risky for short-term investment and can significantly underperform for long durations.
NIFTY-50 index has more chance of extreme outcomes than SFL. Therefore, NIFTY-50 must receive a lower allocation than SFL in your portfolio. NIFTY-50 index usually has shorter drawdown period than SFL.
On a general note (since you are interested in SFL), two instruments that deserve special mention are IGARASHI and HATSUN. They have significantly outperformed the overall market this year.
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