35.65 -0.55 (-1.55%) Sell

Want to invest in CMCSA? Avoid as it is a falling knife that can bleed you if you catch it

14 min read

COMCAST CORP is a falling knife that can bleed you if you catch it on Tuesday. It returned -1.55% to close at 35.65. It is currently trading -17% below it's 52 week high of 42.99.

[Themes containing CMCSA]

CMCSA showed a down trend over the last 3 months. During this period CMCSA returned -4.47% and saw a maximum drawdown of -11.16%. It has been unusually choppy during this period. Long term investors are better off avoiding investing in CMCSA till volatility reduces and a clear trend emerges.


CMCSA has been underperforming the SP500 index in recent time, after having outperformed till 31 May, 2017. Over the last 2 years 11 months and 14 days, CMCSA outperformed the SP500 index on 51% days.

During the last three months CMCSA was mostly loss making and delivered on average -0.06% per day. It's best return during this period (of +5.04%) was on Thursday, 25 Oct, 2018. While it's worst loss in the same period (of -5.99%) was on Monday, 24 Sep, 2018. There was initially a bearish trend during this period which started on 24 Sep, 2018 and went on till 27 Sep, 2018. The trend delivered -7.14% losses to investors. This was followed by a bullish trend that started on 12 Oct, 2018 and ended on 17 Oct, 2018. This bullish trend delivered +7.88% to investors.

On monthly basis, CMCSA delivered profits and losses in equal number of months. CMCSA delivered profits less regularly than SP500 index. CMCSA was also a more risky investment than SP500 index as it's worst month in the last year, Feb 2018, returned -14.86% compared to -7.75% returned by SP500 index in Dec 2018. CMCSA had a longer winning streak of losing months than SP500 index. It went down in 4 straight months (from Feb 2018 to May 2018) during which period it delivered -27.51%. It is interesting to note that both CMCSA and SP500 index significantly outperform during months when quarterly/annual results are announced.

Money never made a man happy yet, nor will it. The more a man has, the more he wants. Instead of filling a vacuum, it makes one.
-- Benjamin Franklin

CMCSA 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 CMCSA's volatility from 19 Sep, 2018 to 31 Oct, 2018. While there was a significant surge in the SP500 index's volatility from 19 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that CMCSA has significant positive skewness in it's return distribution. This indicates that investors can expect CMCSA to recover from drawdowns quickly. Which makes CMCSA a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

Investors trading in CMCSA derivatives at this moment can consider 'Covered Call' options strategy to receive better risk-adjusted returns.

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

On a general note (since you are interested in CMCSA), three instruments that deserve special mention are ECYT, NFEC and PRQR. They have all outperformed the market and must be closely watched for investment opportunities.

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