55.43 -0.72 (-1.3%) Sell

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

13 min read

BARNES GROUP INC was among the worst performers today. It delivered -1.3% to close at 55.43. During the last week it surged by +0.58% and saw a maximum drawdown of -1.48% before bouncing back.

[Themes containing B]

Buy-and-Hold investors in B experienced a maximum drawdown of -24.21% over the last three months. It delivered -20.53% during this strong bearish trending period. There were both Long and Short signals during this period, where the short signals were significantly more profitable than the long signals. The net profit from Short signals was +12.93%.


B has been underperforming the SP500 index in recent time. It showed significant outperformance (compared to the SP500 index) from 28 Jun, 2016 to 18 Oct, 2017. Over the last 2 years 11 months and 10 days, B outperformed the SP500 index on 54% days.

B returned losses on 62% days in the last three months. During this time, it delivered on average -0.35% per day. It delivered it's worst daily return of -6.54%, during this period, on Tuesday, 4 Dec, 2018. The longest stort-term trend during this period was 7 losing days, which started on 4 Oct, 2018 and ended on 12 Oct, 2018. This bearish trend lost -13.15% of investor capital.

The last 12 months saw B's investors making profits in 6 months and incurring losses in 6 months. B was less consistent in delivering monthly returs than SP500 index. B was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -19.13% compared to -7.28% returned by SP500 index in Oct 2018. B had a shorter streak of profitable months than SP500 index. It only went up in 3 straight months during the last year.

Security depends not so much upon how much you have, as upon how much you can do without.
-- Joseph Wood Krutch

B is currently seeing overall fall in volatility. In comparison, the SP500 index is seeing increase in volatility. During the last three months, there was a significant surge in B's volatility from 17 Sep, 2018 to 29 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 B has significant positive skewness in it's return distribution. This indicates that investors can expect B to recover from drawdowns quickly. Which makes B a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

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

Based on your interest in B you may find it interesting to know that AMRH has shown remarkable performance and deserves to be on every investors' watchlist.

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