25.35 -0.39 (-1.55%) Sell

Don't invest in SJVN now, it is an investor's nightmare

13 min read

SJVN has destroyed investor wealth today. On a longer term basis, investors in SJVN LTD made +0.07% per day. Friday's performance of -1.55% was a underperformance compared to it's daily average.

[Themes containing SJVN]

SJVN showed a bullish trend over the last 3 months. During this period SJVN delivered +1.2% and saw a maximum drawdown of -15.69%. It has been unusually choppy during this period. Long term investors are better off avoiding investing in SJVN till volatility reduces and a clear trend emerges.


SJVN has been underperforming the NIFTY-50 index in recent time. It showed significant underperformance (compared to the NIFTY-50 index) from 18 Apr, 2017 to 27 Dec, 2018. Over the last 3 years and 1 month, SJVN underperformed the NIFTY-50 index on 53% days.

During the last three months SJVN delivered losses on 54% days. However, it still managed to end this period in a profit. It's best return during this period (of +13.5%) was on Thursday, 25 Oct, 2018. While it's worst loss in the same period (of -4.22%) was on Monday, 10 Dec, 2018. The longest stort-term trend during this period was 6 losing days, which started on 3 Dec, 2018 and ended on 10 Dec, 2018. This bearish trend lost -7.78% of investor capital.

The last 12 months saw SJVN's investors making profits in 4 months and incurring losses in 8 months. SJVN was less consistent in delivering monthly returs than NIFTY-50 index. SJVN was also a more risky investment than NIFTY-50 index as it's worst month in the last year, May 2018, returned -7.4% compared to -6.42% returned by NIFTY-50 index in Sep 2018. SJVN had a longer winning streak of losing months than NIFTY-50 index. It went down in 3 straight months (from May 2018 to Jul 2018) during which period it delivered -15.14%. It is interesting to note that both SJVN and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

Not everything that can be counted counts, and not everything that counts can be counted.
-- Albert Einstein

SJVN 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 SJVN's volatility from 19 Oct, 2018 to 17 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 SJVN has negative skewness in it's return distribution. This indicates that investors may need to stay invested through long periods of drawdown before expecting a recovery.

NIFTY-50 index has more chance of extreme outcomes than SJVN. Therefore, NIFTY-50 must receive a lower allocation than SJVN in your portfolio. NIFTY-50 index usually has shorter drawdown period than SJVN.

Based on your interest in SJVN you may find it interesting to know that BATAINDIA and HATSUN are both mid caps that have shown remarkable performance and deserve to be on every investors' watchlist.

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