47.57 -1.55 (-3.25%) Sell

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

13 min read

CHINA MOBILE LTD (Foreign) has destroyed investor wealth on Friday. It lost -3.25% to close at 47.57. It is currently trading -10% below it's 52 week high of 53.0.

[Themes containing CHL]

Buy-and-Hold investors in CHL experienced a maximum drawdown of -9.78% over the last three months. It lost -2.02% during this down trending period. There were both Long and Short signals during this period, where the short signals were marginally more profitable than the long signals.


CHL has been outperforming the SP500 index in recent time. Over the last 2 years 11 months and 10 days, CHL underperformed the SP500 index on 51% days.

During the last three months CHL delivered profits on 52% days. However, it still managed to end this period in a loss. It's best return during this period (of +3.43%) was on Monday, 26 Nov, 2018. While it's worst loss in the same period (of -3.32%) was on Monday, 3 Dec, 2018. There was initially a bearish trend during this period which started on 21 Sep, 2018 and went on till 25 Sep, 2018. The trend delivered -1.38% losses to investors. This was followed by a bullish trend that started on 4 Oct, 2018 and ended on 10 Oct, 2018. This bullish trend delivered +5.19% to investors.

CHL had 6 profitable and 6 loss making months over the last year. During the last year, CHL underperformed SP500 index on monthly return basis. CHL was also a more risky investment than SP500 index as it's worst month in the last year, Feb 2018, returned -11.72% compared to -7.28% returned by SP500 index in Oct 2018. CHL 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 CHL and SP500 index significantly outperform during months when quarterly/annual results are announced.

I'm only rich because I know when I'm wrong..I basically have survived by recognizing my mistakes.
-- George Soros

CHL 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 CHL's volatility from 18 Sep, 2018 to 2 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 CHL has significant negative skewness in it's return distribution. This indicates that CHL is very risky for short-term investment and can significantly underperform for long durations.

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

On a general note (since you are interested in CHL), two instruments that deserve special mention are NSPR and AMRH. They have significantly outperformed the overall market.

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