Doubt in the minds of TTML investors as it delivered massive losses
23 Jan, 201913 min read
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TTML delivered massive losses today. On a longer term basis, investors in TATA TELESERV(MAHARASTRA) made -0.05% per day. Wednesday's performance of -1.27% was a underperformance compared to it's daily average.
Buy-and-Hold investors in TTML experienced a maximum drawdown of -11.49% over the last three months. It fell by -6.02% during this 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.
TTML has been underperforming the NIFTY-50 index in recent time. It showed significant underperformance (compared to the NIFTY-50 index) from 1 Mar, 2017 to 20 Jul, 2018. Over the last 3 years and 1 month, TTML underperformed the NIFTY-50 index on 57% days.
TTML returned losses on 75% days in the last three months. During this time, it delivered on average -0.08% per day. It delivered it's best daily return of +7.79%, during this period, on Wednesday, 19 Dec, 2018. The longest stort-term trend during this period was 5 profitable days, which started on 14 Nov, 2018 and went on till 20 Nov, 2018. This bullish trend returned +3.72% to investors.
During the last year TTML had 3 profitable months and 9 loss making months. TTML returned profits in fewer months than NIFTY-50 index. TTML was also a more risky investment than NIFTY-50 index as it's worst month in the last year, Sep 2018, returned -15.69% compared to -6.42% returned by NIFTY-50 index in Sep 2018. TTML and NIFTY-50 index, both had periods of 2 consecutive profitable months. It is interesting to note that both TTML 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
TTML 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 TTML's volatility from 24 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 TTML has significant negative skewness in it's return distribution. This indicates that TTML is very risky for short-term investment and can significantly underperform for long durations.
NIFTY-50 index has more chance of extreme outcomes than TTML. Therefore, NIFTY-50 must receive a lower allocation than TTML in your portfolio. NIFTY-50 index usually has shorter drawdown period than TTML.
Based on your interest in TTML you may find it interesting to know that NIFTY50-DIV-POINT, TIDEWATER and SRIPIPES are all extremely risky investment candidates that must be evaluated carefully. Investors with low risk profile are better off avoiding them till their performance becomes more consistent.
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