44.61 -1.11 (-2.49%) Sell

AFL is a falling knife, continues to bleed every investor trying to catch it

13 min read

AFL ranked among the worst performers today. On a longer term basis, investors in AFLAC INC made -0.02% per day. Friday's performance of -2.49% was a significant underperformance compared to it's daily average.

[Themes containing AFL]

Buy-and-Hold investors in AFL experienced a maximum drawdown of -13.2% over the last three months. It returned -5.19% during this down trending period. There were both Long and Short signals during this period, where the short signals were significantly more profitable than the long signals.


AFL has been outperforming the SP500 index in recent time. Over the last 2 years 11 months and 10 days, AFL outperformed the SP500 index on 55% days.

During the last three months AFL was mostly loss making and delivered on average -0.07% per day. It's best return during this period (of +6.64%) was on Thursday, 13 Dec, 2018. While it's worst loss in the same period (of -3.97%) was on Thursday, 11 Oct, 2018. There was initially a bullish trend during this period which started on 17 Sep, 2018 and went on till 21 Sep, 2018. The bullish trend returned +2.09% to investors. This was followed by a bearish trend that started on 22 Oct, 2018 and ended on 26 Oct, 2018. This bearish trend lost -6.35% of investor capital.

On monthly basis, AFL delivered profits and losses in equal number of months. AFL delivered profits less regularly than SP500 index. AFL was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -8.67% compared to -7.28% returned by SP500 index in Oct 2018. AFL had a shorter streak of profitable months than SP500 index. It only went up in 2 straight months during the last year. It is interesting to note that both AFL and SP500 index significantly outperform during months when quarterly/annual results are announced.

"When you're building a company, you need to continually strengthen every component - finance, strategic partnerships, executive team, and relationships with every last constituency.

AFL is becoming more volatile overall. In comparison, the SP500 index is seeing a rise in volatility. During the last three months, there was a significant surge in AFL's volatility from 21 Sep, 2018 to 25 Oct, 2018. While there was a significant surge in the SP500 index's volatility from 25 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that AFL has significant positive skewness in it's return distribution. This indicates that investors can expect AFL to recover from drawdowns quickly. Which makes AFL a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

Investors trading in AFL derivatives at this moment can consider 'Bull Call Spread' options strategy to receive better risk-adjusted returns.

SP500 index has more chance of extreme outcomes than AFL. Therefore, SP500 must receive a lower allocation than AFL in your portfolio. SP500 index usually has shorter drawdown period than AFL.

On a general note (since you are interested in AFL), if you are evaluating AFL as an investment candidate, then you should read about GTY which has delivered similar performance and can help diversify your portfolio.

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