24.87 -0.1 (-0.4%) Sell

Want to invest in BCEI? Avoid as it has destroyed investor wealth

13 min read

BONANZA CREEK ENERGY, INC. has destroyed investor wealth on Tuesday. It returned -0.4% to close at 24.87. It is currently trading -36% below it's 52 week high of 39.47.

[Themes containing BCEI]

BCEI showed a strong down trend over the last 3 months. During this period BCEI returned -14.89% and saw a maximum drawdown of -19.67%. There were 2 short signals during this period that returned a cumulative of +6.47% to investors.


BCEI has been outperforming the SP500 index in recent time. Over the last 2 years 11 months and 7 days, BCEI underperformed the SP500 index on 55% days.

BCEI returned losses on 54% days in the last three months. During this time, it delivered on average -0.21% per day. It delivered it's best daily return of +12.09%, during this period, on Wednesday, 7 Nov, 2018. There was initially a bullish trend during this period which started on 17 Sep, 2018 and went on till 21 Sep, 2018. The bullish trend returned +5.58% to investors. This was followed by a bearish trend that started on 26 Oct, 2018 and ended on 31 Oct, 2018. This bearish trend lost -7.29% of investor capital.

On monthly basis, BCEI delivered profits in more months over the last year, than losses. BCEI delivered profits less regularly than SP500 index. BCEI significantly outperformed SP500 index in May 2018, when it returned +21.27% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. BCEI 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 BCEI and SP500 index significantly outperform during months when quarterly/annual results are announced.

Money is multiplied in practical value depending on the number of W's you control in your life: what you do, when you do it, where you do it, and with whom you do it.
-- Timothy Ferriss

BCEI 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 BCEI's volatility from 20 Sep, 2018 to 12 Nov, 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 BCEI has significant negative skewness in it's return distribution. This indicates that BCEI is very risky for short-term investment and can significantly underperform for long durations.

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

Based on your interest in BCEI you may find it interesting to know that V is a large cap that has shown remarkable performance and deserves to be on every investors' watchlist.

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