Stop-loss on the minds of BLK investors as it delivered massive losses

BLACKROCK INC. ranked among the worst performers on Friday. It lost -1.78% to close at 393.1. It is currently trading -33% below it's 52 week high of 593.26.

[Themes containing BLK]

Buy-and-Hold investors in BLK experienced a maximum drawdown of -22.34% over the last three months. It lost -17.02% during this strong down trending period. There were no long signals during this period, where the short signal generated good profits of +17.02% for investors.

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BLK has been underperforming the SP500 index in recent time, after having outperformed till 19 Jan, 2018. Over the last 2 years 11 months and 3 days, BLK underperformed the SP500 index on 48% days. Which indicates that on days BLK underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months BLK was mostly loss making and delivered on average -0.28% per day. It's best return during this period (of +3.51%) was on Thursday, 25 Oct, 2018. While it's worst loss in the same period (of -6.76%) was on Wednesday, 10 Oct, 2018. There was initially a bearish trend during this period which started on 11 Sep, 2018 and went on till 13 Sep, 2018. The trend delivered -1.01% losses to investors. This was followed by a bullish trend that started on 18 Sep, 2018 and ended on 21 Sep, 2018. This bullish trend delivered +3.52% to investors.

BLK had 5 profitable and 7 loss making months over the last year. During the last year, BLK underperformed SP500 index on monthly return basis. BLK was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -13.11% compared to -7.28% returned by SP500 index in Oct 2018. BLK 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 -19.43%. It is interesting to note that both BLK and SP500 index significantly outperform during months when quarterly/annual results are announced.

Money never made a man happy yet, nor will it. The more a man has, the more he wants. Instead of filling a vacuum, it makes one.
-- Benjamin Franklin

BLK is becoming more volatile overall. In comparison, the SP500 index is seeing a rise in volatility. During the last three months, there was a significant surge in BLK's volatility from 12 Sep, 2018 to 7 Dec, 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 BLK has significant positive skewness in it's return distribution. This indicates that investors can expect BLK to recover from drawdowns quickly. Which makes BLK a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

Investors trading in BLK derivatives at this moment can consider 'Calendar Spread' options strategy to receive better risk-adjusted returns.

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

On a general note (since you are interested in BLK), three mid cap instruments that deserve special mention are TWTR, SQ and AMD. They have all outperformed the market and must be closely watched for investment opportunities.