Want to invest in TVSMOTOR? Avoid as it was among the worst performers
18 Jan, 201913 min read
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TVS MOTOR COMPANY LTD was among the worst performers today. It returned -2.1% to close at 535.65. It's recent 5 day performance has been -0.32%, +0.9%, +1.69%, -1.05% and +0.09%.
TVSMOTOR showed a up trend over the last 3 months. During this period TVSMOTOR gained +4.21% and saw a maximum drawdown of -7.77%. It has been unusually choppy during this period. Long term investors are better off avoiding investing in TVSMOTOR till volatility reduces and a clear trend emerges.
TVSMOTOR has been underperforming the NIFTY-50 index in recent time, after having outperformed till 19 Dec, 2017. Over the last 3 years and 1 month, TVSMOTOR outperformed the NIFTY-50 index on 51% days.
TVSMOTOR was profitable on 61% 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 +5.46%, during this period, on Monday, 29 Oct, 2018. There was initially a bearish trend during this period which started on 24 Oct, 2018 and went on till 25 Oct, 2018. The trend delivered -3.03% losses to investors. This was followed by a bullish trend that started on 31 Oct, 2018 and ended on 5 Nov, 2018. This bullish trend delivered +3.65% to investors.
On monthly basis, TVSMOTOR delivered losses in more months over the last year, than profits. TVSMOTOR delivered profits less regularly than NIFTY-50 index. TVSMOTOR was also a more risky investment than NIFTY-50 index as it's worst month in the last year, May 2018, returned -12.03% compared to -6.42% returned by NIFTY-50 index in Sep 2018. TVSMOTOR 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 -25.06%.
A real entrepreneur is somebody who has no safety net underneath them.
-- Henry Kravis
TVSMOTOR 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 TVSMOTOR's volatility from 23 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 TVSMOTOR 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.
Investors trading in TVSMOTOR derivatives at this moment can consider 'Long Straddle' options strategy to receive better risk-adjusted returns.
TVSMOTOR has more chance of extreme outcomes than the NIFTY-50 index. Therefore, TVSMOTOR must receive a lower allocation than NIFTY-50 in your portfolio. NIFTY-50 index usually has shorter drawdown period than TVSMOTOR.
On a general note (since you are interested in TVSMOTOR), two instruments that deserve special mention are BAJFINANCE and ~MKTCAP201TO250. They have significantly outperformed the overall market.
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