31.24 +0.06 (+0.19%) Sell

BTU investors hold onto their investments as it marginally outperforms

13 min read

PEABODY ENERGY CORP ranked better than it's peers today. It delivered +0.19% to close at 31.24. During the last week it fell by -4.49% and saw a maximum drawdown of -6.24% before bouncing back.

[Themes containing BTU]

Buy-and-Hold investors in BTU experienced a maximum drawdown of -31.4% over the last three months. It fell by -28.77% during this strong bearish trending period. There were no long signals during this period, where the short signal generated good profits of +28.77% for investors.


BTU has been underperforming the SP500 index in recent time. It showed significant outperformance (compared to the SP500 index) from 23 Jun, 2017 to 14 Jun, 2018. Over the last 1 year 8 months and 7 days, BTU outperformed the SP500 index on 55% days.

During the last three months BTU was mostly loss making and delivered on average -0.5% per day. It's best return during this period (of +5.62%) was on Monday, 3 Dec, 2018. While it's worst loss in the same period (of -13.45%) was on Friday, 28 Sep, 2018. The longest stort-term trends during this period were 4 profitable and losing days. The bullish trend (which returned +4.8%) started on 2 Nov, 2018 and went on till 7 Nov, 2018 while the bearish trend (which returned -16.29%) started on 26 Sep, 2018 and went on till 1 Oct, 2018.

During the last year BTU had 5 profitable months and 7 loss making months. BTU returned profits in fewer months than SP500 index. BTU significantly outperformed SP500 index in May 2018, when it returned +17.42% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. BTU had a longer winning streak of losing months than SP500 index. It went down in 5 straight months (from Jul 2018 to Nov 2018) during which period it delivered -35.0%. It is interesting to note that both BTU and SP500 index significantly outperform during months when quarterly/annual results are announced.

I will tell you the secret to getting rich on Wall Street. You try to be greedy when others are fearful. And you try to be fearful when others are greedy.
-- Warren Buffett

BTU 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 BTU's volatility from 14 Sep, 2018 to 28 Sep, 2018. While there was a significant surge in the SP500 index's volatility from 13 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that BTU has significant positive skewness in it's return distribution. This indicates that investors can expect BTU to recover from drawdowns quickly. Which makes BTU 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 BTU. Therefore, SP500 must receive a lower allocation than BTU in your portfolio. SP500 index usually has shorter drawdown period than BTU.

On a general note (since you are interested in BTU), two instruments that have delivered similar performance as BTU are CMRE and MRTN. They are suitable as good alternative investment candidates that can diversify your portfolio.

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