BTG investors herd to book profits while the going is good
14 Dec, 201813 min read
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B2GOLD CORP (Foreign) significantly underperformed on Friday. It lost -2.24% to close at 2.62. On a day when the overall market breadth was 35%, it closed higher than 75% of the market. In comparison, the benchmark SP500 index closed today at -0.0191%.
BTG is currently in a up trend. The current bullish signal has generated a profit of +7.82% for BTG's investors in the last three months.
BTG has been outperforming the SP500 index in recent time. Over the last 2 years 11 months and 10 days, BTG outperformed the SP500 index on 50% days. Which indicates that on days BTG outperforms the SP500 index, it's performance is marginally better than on the days it underperforms the SP500 index.
During the last three months BTG was mostly profitable and delivered on average +0.29% per day. It's best return during this period (of +6.35%) was on Friday, 7 Dec, 2018. While it's worst loss in the same period (of -7.35%) was on Thursday, 25 Oct, 2018. There was initially a bullish trend during this period which started on 2 Oct, 2018 and went on till 8 Oct, 2018. The bullish trend returned +9.73% to investors. This was followed by a bearish trend that started on 8 Nov, 2018 and ended on 13 Nov, 2018. This bearish trend lost -7.75% of investor capital.
BTG had 3 profitable and 9 loss making months over the last year. During the last year, BTG underperformed SP500 index on monthly return basis. BTG was also a more risky investment than SP500 index as it's worst month in the last year, Mar 2018, returned -8.08% compared to -7.28% returned by SP500 index in Oct 2018. BTG had a longer winning streak of losing months than SP500 index. It went down in 5 straight months (from May 2018 to Sep 2018) during which period it delivered -20.86%. It is interesting to note that both BTG and SP500 index significantly outperform during months when quarterly/annual results are announced.
Success usually comes to those who are too busy to be looking for it.
-- Henry David Thoreau
BTG is becoming less volatile overall. In comparison, the SP500 index is seeing a rise in volatility. During the last three months, there was a significant surge in BTG's volatility from 18 Sep, 2018 to 29 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 BTG 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.
BTG has more chance of extreme outcomes than the SP500 index. Therefore, BTG must receive a lower allocation than SP500 in your portfolio. SP500 index usually has shorter drawdown period than BTG.
On a general note (since you are interested in BTG), two mid cap instruments that deserve special mention are LULU and TWTR. They have significantly outperformed the overall market.
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