16.63 -0.14 (-0.83%) Sell

Prayers for BPY investors as it ranked among the worst performers

13 min read

BPY ranked among the worst performers today. On a longer term basis, investors in BROOKFIELD PROPERTY PARTNERS L.P. (Foreign) made -0.01% per day. Thursday's performance of -0.83% was a underperformance compared to it's daily average.

[Themes containing BPY]

Buy-and-Hold investors in BPY experienced a maximum drawdown of -20.79% over the last three months. It delivered -17.96% 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 +9.91%.


BPY has been underperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 12 May, 2016 to 3 Dec, 2018. Over the last 2 years 11 months and 9 days, BPY underperformed the SP500 index on 50% days. Which indicates that on days BPY underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

BPY returned losses on 57% days in the last three months. During this time, it delivered on average -0.31% per day. It delivered it's worst daily return of -3.61%, during this period, on Monday, 10 Dec, 2018. The longest stort-term trend during this period was 5 losing days, which started on 14 Nov, 2018 and ended on 20 Nov, 2018. This bearish trend lost -7.05% of investor capital.

The last 12 months saw BPY's investors making profits in 4 months and incurring losses in 8 months. BPY was less consistent in delivering monthly returs than SP500 index. BPY was also a more risky investment than SP500 index as it's worst month in the last year, Nov 2018, returned -8.54% compared to -7.28% returned by SP500 index in Oct 2018. BPY had a longer winning streak of losing months than SP500 index. It went down in 3 straight months (from Jan 2018 to Mar 2018) during which period it delivered -14.11%. It is interesting to note that both BPY and SP500 index significantly outperform during months when quarterly/annual results are announced.

The habit of saving is itself an education; it fosters every virtue, teaches self-denial, cultivates the sense of order, trains to forethought, and so broadens the mind.
-- T.T. Munger

BPY 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 BPY's volatility from 19 Sep, 2018 to 10 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 BPY has significant positive skewness in it's return distribution. This indicates that investors can expect BPY to recover from drawdowns quickly. Which makes BPY a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

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

On a general note (since you are interested in BPY), three instruments that have performed similar to BPY are WSO, PGR and CHCO. They must all be evaluated as alternative investment options and for diversification.

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