BROWN FORMAN CORP

47.06 -0.45 (-0.95%) Sell

Don't buy BFB now, it is a risky investment

13 min read

BROWN FORMAN CORP delivered massive losses today. It fell by -0.95% to close at 47.06. It's recent 5 day performance has been +2.13%, +0.17%, +0.11%, +1.0% and 0.0%.

[Themes containing BFB]

BFB showed a bearish trend over the last 3 months. During this period BFB fell by -4.15% and saw a maximum drawdown of -10.47%. It has been unusually choppy during this period. Long term investors are better off avoiding investing in BFB till volatility reduces and a clear trend emerges.

Trend

BFB has been outperforming the SP500 index in recent time. It showed significant outperformance (compared to the SP500 index) from 14 Jul, 2017 to 28 Feb, 2018. Over the last 2 years 11 months and 10 days, BFB underperformed the SP500 index on 45% days. Which indicates that on days BFB underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

BFB was profitable on 50% days in the last three months. During this time, it delivered on average -0.05% per day. It delivered it's worst daily return of -5.8%, during this period, on Wednesday, 10 Oct, 2018. The longest stort-term trend during this period was 5 profitable days, which started on 1 Nov, 2018 and went on till 7 Nov, 2018. This bullish trend returned +6.34% to investors.

During the last year BFB had 6 profitable months and 6 loss making months. BFB returned profits in fewer months than SP500 index. BFB significantly outperformed SP500 index in Feb 2018, when it returned +25.88% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. BFB had a longer winning streak of losing months than SP500 index. It went down in 3 straight months (from Aug 2018 to Oct 2018) during which period it delivered -14.4%. It is interesting to note that both BFB and SP500 index significantly outperform during months when quarterly/annual results are announced.

"Inflation is taxation without legislation.

BFB is currently seeing overall increase in volatility. In comparison, the SP500 index is seeing increase in volatility. During the last three months, there was a significant surge in BFB's volatility from 9 Oct, 2018 to 7 Dec, 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 BFB 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 BFB. Therefore, SP500 must receive a lower allocation than BFB in your portfolio. SP500 index usually has shorter drawdown period than BFB.

Based on your interest in BFB you may find it interesting to know that NVCN, IX and GNK are all extremely risky investment candidates that must be evaluated carefully. Investors with low risk profile are better off avoiding them till their performance becomes more consistent.

Want to improve your Portfolio's performance?

Spotalpha's Portfolio optimizer is all you need to improve your returns and reduce your risk.
Optimize Portfolio NOW
Following
Symbol Price {{retType}} | Tr.
{{detail.symbol}} {{detail.close}} {{detail.priceChange}}  {{detail.pctChange}}%  {{detail.name}} {{detail.trend}} 
 
If you liked what you read here ...

... we have a small favour to ask. Help us bring the power of algorithmic trading strategies to individual investors.

All content in this article was automatically generated by algorithms. This ensures that there are no human biases in the analysis provided. This approach to investing is not new and has been around for more than three decades. Yet, it has been available to only the most affluent or elite investors leaving individual investors to trade on emotions (such as fear and greed), intuition and poor analysis from third-parties. We want to change this.

We want to empower investors with all the tools and analysis required by them to make a rational investment decision.

If you found Spotalpha useful, consider making a contribution. For as little as $5 you can support our efforts and it takes less than a minute. Thank you. Contribute
Share with friends   WhatsApp   Facebook   Twitter