TI investors herd to book profits while the going is good
18 Jan, 201913 min read
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TILAKNAGAR INDUSTRIES LTD ranked among the worst performers on Friday. It delivered -8.0% to close at 16.1. On a day when the overall market breadth was 71%, it closed higher than 19% of the market. In comparison, the benchmark NIFTY-50 index closed today at +0.02%.
TI showed a bullish trend over the last 3 months. During this period TI increased by +5.57% and saw a maximum drawdown of -8.85%. There were 2 long signals during this period that returned a cumulative of +3.02% to investors.
TI has been outperforming the NIFTY-50 index in recent time. It showed significant underperformance (compared to the NIFTY-50 index) from 6 Jan, 2016 to 14 Aug, 2018. Over the last 3 years and 1 month, TI underperformed the NIFTY-50 index on 57% days.
During the last three months TI delivered losses on 55% days. However, it still managed to end this period in a profit. It's best return during this period (of +9.72%) was on Thursday, 17 Jan, 2019. While it's worst loss in the same period (of -8.0%) was on Friday, 18 Jan, 2019. The longest stort-term trend during this period was 6 profitable days, which started on 27 Dec, 2018 and went on till 3 Jan, 2019. This bullish trend returned +7.89% to investors.
The last 12 months saw TI's investors making profits in 6 months and incurring losses in 6 months. During the last year, TI and NIFTY-50 index had the same number of profitable months. TI significantly outperformed NIFTY-50 index in Apr 2018, when it returned +23.12% compared to +6.56% returned by NIFTY-50 index during it's best month in the last one year - Jul 2018. TI 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 -35.11%. It is interesting to note that both TI 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.
TI is currently seeing overall increase in volatility. In comparison, the NIFTY-50 index is seeing decrease in volatility. During the last three months, there was a significant surge in TI's volatility from 22 Nov, 2018 to 18 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 TI has significant negative skewness in it's return distribution. This indicates that TI is very risky for short-term investment and can significantly underperform for long durations.
NIFTY-50 index has more chance of extreme outcomes than TI. Therefore, NIFTY-50 must receive a lower allocation than TI in your portfolio. NIFTY-50 index usually has shorter drawdown period than TI.
Based on your interest in TI you may find it interesting to know that BAJFINANCE is a large cap that has shown remarkable performance and deserves to be on every investors' watchlist.
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