BCE investors herd to book profits while the going is good
07 Dec, 201813 min read
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BCE INC (Foreign) ranked among the worst performers on Friday. It fell by -0.44% to close at 42.8. On a day when the overall market breadth was 35%, it closed higher than 18% of the market. In comparison, the benchmark SP500 index closed today at -0.0233%.
BCE is currently in a bullish trend. The current bullish signal has generated a profit of +4.67% for BCE's investors in the last three months.
BCE has been outperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 27 Jun, 2016 to 24 Sep, 2018. Over the last 2 years 11 months and 3 days, BCE underperformed the SP500 index on 48% days. Which indicates that on days BCE underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.
During the last three months BCE delivered losses on 54% days. However, it still managed to end this period in a profit. It's best return during this period (of +4.94%) was on Thursday, 1 Nov, 2018. While it's worst loss in the same period (of -1.74%) was on Tuesday, 9 Oct, 2018. The longest stort-term trend during this period was 6 losing days, which started on 22 Oct, 2018 and ended on 29 Oct, 2018. This bearish trend lost -4.19% of investor capital.
During the last year BCE had 2 profitable months and 10 loss making months. BCE returned profits in fewer months than SP500 index. BCE significantly outperformed SP500 index in Nov 2018, when it returned +10.29% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. BCE had a longer winning streak of losing months than SP500 index. It went down in 6 straight months (from Jan 2018 to Jun 2018) during which period it delivered -15.22%. It is interesting to note that both BCE and SP500 index significantly outperform during months when quarterly/annual results are announced.
Not everything that can be counted counts, and not everything that counts can be counted.
-- Albert Einstein
BCE 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 BCE's volatility from 8 Oct, 2018 to 1 Nov, 2018. While there was a significant surge in the SP500 index's volatility from 10 Sep, 2018 to 29 Oct, 2018.
Advanced/professional short-term investors should note that BCE has significant positive skewness in it's return distribution. This indicates that investors can expect BCE to recover from drawdowns quickly. Which makes BCE a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.
BCE has more chance of extreme outcomes than the SP500 index. Therefore, BCE must receive a lower allocation than SP500 in your portfolio. SP500 index usually has shorter drawdown period than BCE.
Based on your interest in BCE you may find it interesting to know that TYHT has shown remarkable performance and deserves to be on every investors' watchlist.
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