Doubt in the minds of AMZN investors as it ranked among the worst performers
22 Jan, 201913 min read
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AMAZON COM INC was among the worst performers today. It fell by -3.77% to close at 1632.17. During the last week it fell by -2.53% and saw a maximum drawdown of -3.77% before bouncing back.
Buy-and-Hold investors in AMZN experienced a maximum drawdown of -24.59% over the last three months. It fell by -7.72% during this bearish trending period. There were no long signals during this period, where the short signal generated good profits of +7.72% for investors.
AMZN has been outperforming the SP500 index in recent time. It showed significant outperformance (compared to the SP500 index) from 9 Feb, 2016 to 4 Sep, 2018. Over the last 3 years and 1 month, AMZN outperformed the SP500 index on 53% days.
During the last three months AMZN was mostly loss making and delivered on average -0.07% per day. It's best return during this period (of +9.45%) was on Wednesday, 26 Dec, 2018. While it's worst loss in the same period (of -7.82%) was on Friday, 26 Oct, 2018. The longest stort-term trend during this period was 5 losing days, which started on 8 Nov, 2018 and ended on 14 Nov, 2018. This bearish trend lost -9.18% of investor capital.
During the last year AMZN had 8 profitable months and 4 loss making months. Profitable number of months of AMZN and SP500 index were the same. AMZN was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -20.27% compared to -9.94% returned by SP500 index in Dec 2018. AMZN had a shorter streak of profitable months than SP500 index. It only went up in 5 straight months during the last year. It is interesting to note that both AMZN and SP500 index significantly outperform during months when quarterly/annual results are announced.
Financial peace isn't the acquisition of stuff. It's learning to live on less than you make, so you can give money back and have money to invest. You can't win until you do this.
-- Dave Ramsey
AMZN is currently seeing overall fall in volatility. In comparison, the SP500 index is seeing decrease in volatility. During the last three months, there was a significant fall in AMZN's volatility from 29 Oct, 2018 to 18 Jan, 2019. While there was a significant surge in the SP500 index's volatility from 27 Nov, 2018 to 27 Dec, 2018.
Advanced/professional short-term investors should note that AMZN 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 AMZN derivatives at this moment can consider 'Married Call' options strategy to receive better risk-adjusted returns.
SP500 index has more chance of extreme outcomes than AMZN. Therefore, SP500 must receive a lower allocation than AMZN in your portfolio. SP500 index usually has shorter drawdown period than AMZN.
On a general note (since you are interested in AMZN), TNDM has performed really well this year and deserves to be closely tracked for investment opportunities.
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