30.52 +0.03 (+0.1%) Sell

BX shows sign of weakness as investors do cost averaging

13 min read

BLACKSTONE GROUP L.P. showed marginal outperformance on Tuesday. It increased by +0.1% to close at 30.52. On a day when the overall market breadth was 35%, it closed higher than 8% of the market. In comparison, the benchmark SP500 index closed today at -0.0004%.

[Themes containing BX]

BX showed a strong bearish trend over the last 3 months. During this period BX fell by -14.75% and saw a maximum drawdown of -23.33%. There were 2 short signals during this period that returned a cumulative of +8.62% to investors.


BX has been underperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 4 Mar, 2016 to 14 May, 2018. Over the last 2 years 11 months and 7 days, BX underperformed the SP500 index on 51% days.

During the last three months BX was mostly loss making and delivered on average -0.22% per day. It's best return during this period (of +4.65%) was on Wednesday, 21 Nov, 2018. While it's worst loss in the same period (of -6.4%) was on Wednesday, 10 Oct, 2018. The longest stort-term trend during this period was 6 losing days, which started on 4 Oct, 2018 and ended on 11 Oct, 2018. This bearish trend lost -11.82% of investor capital.

During the last year BX had 7 profitable months and 5 loss making months. BX returned profits in fewer months than SP500 index. BX was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -16.51% compared to -7.28% returned by SP500 index in Oct 2018. BX had a shorter streak of profitable months than SP500 index. It only went up in 5 straight months during the last year.

"Great businesses produce great results

BX 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 BX's volatility from 13 Sep, 2018 to 11 Dec, 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 BX 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.

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

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

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

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