Waiting to invest in BEL? Consider it, because it showed marginal outperformance
11 Dec, 201813 min read
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BELMOND LTD. showed marginal outperformance on Tuesday. It increased by +0.06% to close at 18.06. It is currently trading +73% above it's 52 week low of 10.4 and is down only -4% from it's 52 week high.
BEL showed a bullish trend over the last 3 months. During this period BEL increased by +7.5% and saw a maximum drawdown of -7.32%. It has been unusually choppy during this period. Long term investors are better off avoiding investing in BEL till volatility reduces and a clear trend emerges.
BEL has been outperforming the SP500 index in recent time. It showed significant outperformance (compared to the SP500 index) from 8 Aug, 2018 to 23 Nov, 2018. Over the last 2 years 11 months and 7 days, BEL outperformed the SP500 index on 49% days. Which indicates that on days BEL outperforms the SP500 index, it's performance is marginally better than on the days it underperforms the SP500 index.
During the last three months BEL was mostly profitable and delivered on average +0.13% per day. It's best return during this period (of +6.84%) was on Wednesday, 7 Nov, 2018. While it's worst loss in the same period (of -4.07%) was on Monday, 29 Oct, 2018. The longest stort-term trend during this period was 5 profitable days, which started on 13 Nov, 2018 and went on till 19 Nov, 2018. This bullish trend returned +5.54% to investors.
The last 12 months saw BEL's investors making profits in 6 months and incurring losses in 6 months. BEL was less consistent in delivering monthly returs than SP500 index. BEL significantly outperformed SP500 index in Aug 2018, when it returned +48.89% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. BEL had a shorter streak of profitable months than SP500 index. It only went up in 3 straight months during the last year.
"Finance is a gun. Politics is knowing when to pull the trigger.
BEL 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 fall in BEL's volatility from 13 Sep, 2018 to 20 Sep, 2018. While there was a significant surge in the SP500 index's volatility from 13 Sep, 2018 to 29 Oct, 2018.
Advanced/professional short-term investors should note that BEL 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 BEL. Therefore, SP500 must receive a lower allocation than BEL in your portfolio. SP500 index usually has shorter drawdown period than BEL.
On a general note (since you are interested in BEL), three instruments that are extremely volatile are VIPS, ICPT and IX. They must all be evaluated prudently and investors are better off avoiding them at the moment.
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