11.85 -0.12 (-1.0%) Buy

AU investors herd to book profits while the going is good

13 min read

AU was among the worst performers today. On a longer term basis, investors in ANGLOGOLD ASHANTI LTD (Foreign) made -0.01% per day. Friday's performance of -1.0% was a significant underperformance compared to it's daily average.

[Themes containing AU]

Buy-and-Hold investors in AU experienced a maximum drawdown of -10.74% over the last three months. It grew by +42.09% during this strong up trending period. There were both Long and Short signals during this period, while the long signals were significantly more profitable than the short signals. The net profit from Long signals was +36.89%.


AU has been outperforming the SP500 index in recent time. Over the last 2 years 11 months and 10 days, AU outperformed the SP500 index on 49% days. Which indicates that on days AU outperforms the SP500 index, it's performance is marginally better than on the days it underperforms the SP500 index.

During the last three months AU was mostly profitable and delivered on average +0.59% per day. It's best return during this period (of +6.52%) was on Thursday, 11 Oct, 2018. While it's worst loss in the same period (of -5.27%) was on Tuesday, 6 Nov, 2018. There was initially a bullish trend during this period which started on 17 Sep, 2018 and went on till 25 Sep, 2018. The bullish trend returned +6.45% to investors. This was followed by a bearish trend that started on 26 Sep, 2018 and ended on 1 Oct, 2018. This bearish trend lost -3.87% of investor capital.

On monthly basis, AU delivered profits in more months over the last year, than losses. AU delivered profits less regularly than SP500 index. AU significantly outperformed SP500 index in Dec 2018, when it returned +19.46% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. AU had a shorter streak of profitable months than SP500 index. It only went up in 4 straight months during the last year. It is interesting to note that both AU and SP500 index significantly outperform during months when quarterly/annual results are announced.

An investment in knowledge pays the best interest.
-- Benjamin Franklin

AU 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 fall in AU's volatility from 17 Sep, 2018 to 27 Nov, 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 AU has significant negative skewness in it's return distribution. This indicates that AU is very risky for short-term investment and can significantly underperform for long durations.

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

On a general note (since you are interested in AU), three large cap instruments that deserve special mention are MSFT, AMZN and CSCO. They have all outperformed the market and must be closely watched for investment opportunities.

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