ANHEUSER-BUSCH INBEV SA (FOREIGN)

69.7 -1.56 (-2.24%) Sell

BUD is a falling knife, continues to bleed every investor trying to catch it

14 min read

BUD is a falling knife that can bleed you if you catch it today. On a longer term basis, investors in ANHEUSER-BUSCH INBEV SA (Foreign) made 0.0% per day. Friday's performance of -2.24% was a significant underperformance compared to it's daily average.

[Themes containing BUD]

BUD showed a strong down trend over the last 3 months. During this period BUD lost -22.38% and saw a maximum drawdown of -24.27%. There was a short signal during this period which returned +22.38%.

Trend

BUD has been outperforming the SP500 index in recent time. Over the last 2 years 11 months and 10 days, BUD underperformed the SP500 index on 50% days. Which indicates that on days BUD underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months BUD was mostly loss making and delivered on average -0.39% per day. It's best return during this period (of +4.63%) was on Wednesday, 14 Nov, 2018. While it's worst loss in the same period (of -9.37%) was on Thursday, 25 Oct, 2018. There was initially a bullish trend during this period which started on 13 Nov, 2018 and went on till 16 Nov, 2018. The bullish trend returned +7.56% to investors. This was followed by a bearish trend that started on 30 Nov, 2018 and ended on 11 Dec, 2018. This bearish trend lost -9.23% of investor capital.

BUD had 5 profitable and 7 loss making months over the last year. During the last year, BUD underperformed SP500 index on monthly return basis. BUD was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -14.51% compared to -7.28% returned by SP500 index in Oct 2018. BUD 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 -28.93%. It is interesting to note that both BUD and SP500 index significantly outperform during months when quarterly/annual results are announced.

"Finance is not merely about making money. It's about achieving our deep goals and protecting the fruits of our labor. It's about stewardship and, therefore, about achieving the good society.

BUD 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 BUD's volatility from 17 Sep, 2018 to 11 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 BUD has significant positive skewness in it's return distribution. This indicates that investors can expect BUD to recover from drawdowns quickly. Which makes BUD a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

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

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

On a general note (since you are interested in BUD), three instruments that are extremely volatile are IX, GNK and IMTE. They must all be evaluated prudently and investors are better off avoiding them at the moment.

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