16.02 -0.02 (-0.12%) Buy

Search for alternative investments is on for BT investors as it ranked worse than it's peers

13 min read

BT GROUP PLC (Foreign) has destroyed investor wealth on Thursday. It delivered -0.12% to close at 16.02. On a day when the overall market breadth was 35%, it closed higher than 73% of the market. In comparison, the benchmark SP500 index closed today at -0.0002%.

[Themes containing BT]

Buy-and-Hold investors in BT experienced a maximum drawdown of -8.79% over the last three months. It surged by +7.44% during this bullish trending period. There were no short signals during this period, while the long signal generated good profits of +7.58% for investors.


BT has been outperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 3 Feb, 2016 to 31 Aug, 2018. Over the last 2 years 11 months and 9 days, BT underperformed the SP500 index on 52% days.

BT returned losses on 56% days in the last three months. During this time, it delivered on average +0.14% per day. It delivered it's best daily return of +11.94%, during this period, on Thursday, 1 Nov, 2018. The longest stort-term trend during this period was 4 losing days, which started on 21 Sep, 2018 and ended on 26 Sep, 2018. This bearish trend lost -1.46% of investor capital.

The last 12 months saw BT's investors making profits in 6 months and incurring losses in 6 months. BT was less consistent in delivering monthly returs than SP500 index. BT was also a more risky investment than SP500 index as it's worst month in the last year, May 2018, returned -21.22% compared to -7.28% returned by SP500 index in Oct 2018. BT had a shorter streak of profitable months than SP500 index. It only went up in 3 straight months during the last year. It is interesting to note that both BT and SP500 index significantly outperform during months when quarterly/annual results are announced.

"My father, being a Scotsman, taught me to look after finances. I'm shrewd. Some people may call me tight.

BT 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 BT's volatility from 21 Sep, 2018 to 2 Nov, 2018. While there was a significant surge in the SP500 index's volatility from 14 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that BT has significant positive skewness in it's return distribution. This indicates that investors can expect BT to recover from drawdowns quickly. Which makes BT a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

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

On a general note (since you are interested in BT), PFE is a large cap that deserves to be closely tracked for investment opportunities.

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