129.52 +3.12 (+2.41%) Sell

BH investors update their stop-losses higher

13 min read

BIGLARI HOLDINGS INC. outperformed the broader market today. It increased by +2.41% to close at 129.52. During the last week it delivered -4.75% and saw a maximum drawdown of -6.99% before bouncing back.

[Themes containing BH]

Buy-and-Hold investors in BH experienced a maximum drawdown of -35.26% over the last three months. It delivered -33.17% 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 +30.82%.


BH has been underperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 11 Nov, 2016 to 3 Dec, 2018. Over the last 2 years 11 months and 9 days, BH underperformed the SP500 index on 51% days.

During the last three months BH was mostly loss making and delivered on average -0.63% per day. It's best return during this period (of +4.32%) was on Thursday, 1 Nov, 2018. While it's worst loss in the same period (of -4.75%) was on Wednesday, 31 Oct, 2018. The longest stort-term trend during this period was 6 losing days, which started on 17 Oct, 2018 and ended on 24 Oct, 2018. This bearish trend lost -12.94% of investor capital.

The last 12 months saw BH's investors making profits in 3 months and incurring losses in 9 months. BH was less consistent in delivering monthly returs than SP500 index. BH was also a more risky investment than SP500 index as it's worst month in the last year, May 2018, returned -37.13% compared to -7.28% returned by SP500 index in Oct 2018. BH had a longer winning streak of losing months than SP500 index. It went down in 5 straight months (from Mar 2018 to Jul 2018) during which period it delivered -70.09%.

"Finance is a gun. Politics is knowing when to pull the trigger.

BH 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 BH's volatility from 10 Oct, 2018 to 15 Nov, 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 BH has positive skewness in it's return distribution. This indicates that investors can expect BH to make attempts to recover from drawdowns quickly. Which makes BH a good candidate for momentum based trading on short-term bullish trends or counter-trends.

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

On a general note (since you are interested in BH), three instruments that deserve special mention are AYTU, NSPR and ~SMALLCAP. They have all outperformed the market and must be closely watched for investment opportunities.

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