164.09 -1.12 (-0.68%) Sell

Don't buy ASML now, it is a really dangerous investment now

13 min read

ASML HOLDING NV (Foreign) has destroyed investor wealth today. It lost -0.68% to close at 164.09. It's recent 5 day performance has been +2.32%, +0.04%, +1.18%, -4.1% and -1.94%.

[Themes containing ASML]

ASML showed a strong down trend over the last 3 months. During this period ASML lost -10.99% and saw a maximum drawdown of -17.54%. It has been unusually choppy during this period. Long term investors are better off avoiding investing in ASML till volatility reduces and a clear trend emerges.


ASML has been underperforming the SP500 index in recent time, after having outperformed till 23 Jul, 2018. Over the last 2 years 11 months and 9 days, ASML outperformed the SP500 index on 54% days.

ASML returned losses on 56% days in the last three months. During this time, it delivered on average -0.15% per day. It delivered it's worst daily return of -8.55%, during this period, on Wednesday, 24 Oct, 2018. There was initially a bullish trend during this period which started on 18 Sep, 2018 and went on till 20 Sep, 2018. The bullish trend returned +4.52% to investors. This was followed by a bearish trend that started on 25 Sep, 2018 and ended on 28 Sep, 2018. This bearish trend lost -1.81% of investor capital.

ASML had 5 profitable and 7 loss making months over the last year. During the last year, ASML underperformed SP500 index on monthly return basis. ASML significantly outperformed SP500 index in Jan 2018, when it returned +14.2% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. ASML had a longer winning streak of losing months than SP500 index. It went down in 5 straight months (from Aug 2018 to Dec 2018) during which period it delivered -26.64%. It is interesting to note that both ASML and SP500 index significantly outperform during months when quarterly/annual results are announced.

"Based on my own personal experience - both as an investor in recent years and an expert witness in years past - rarely do more than three or four variables really count. Everything else is noise.

ASML is becoming less volatile overall. In comparison, the SP500 index is seeing a rise in volatility. During the last three months, there was a significant surge in ASML's volatility from 24 Sep, 2018 to 29 Oct, 2018. While there was a significant surge in the SP500 index's volatility from 14 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that ASML 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.

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

Based on your interest in ASML you may find it interesting to know that ~SMALLCAP and APRN have both shown remarkable performance and deserve to be on every investors' watchlist.

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