Stop-loss on the minds of CROX investors as it underperforms
14 Dec, 201813 min read
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CROCS, INC. trailed the broader market today. It returned -0.04% to close at 25.39. During the last week it returned -0.39% and saw a maximum drawdown of -2.23% before bouncing back.
CROX is currently in a up trend. The previous long signal in CROX has not been profitable for investors in general. If you are invested in CROX at current levels please make sure that your allocation is limited and that your portfolio is well diversified.
CROX has been outperforming the SP500 index in recent time. Over the last 2 years 11 months and 10 days, CROX outperformed the SP500 index on 51% days.
During the last three months CROX was mostly profitable and delivered on average +0.34% per day. It's best return during this period (of +27.57%) was on Thursday, 8 Nov, 2018. While it's worst loss in the same period (of -7.24%) was on Friday, 9 Nov, 2018. There was initially a bearish trend during this period which started on 21 Sep, 2018 and went on till 27 Sep, 2018. The trend delivered -2.33% losses to investors. This was followed by a bullish trend that started on 25 Oct, 2018 and ended on 30 Oct, 2018. This bullish trend delivered +9.73% to investors.
On monthly basis, CROX delivered profits in more months over the last year, than losses. CROX delivered profits less regularly than SP500 index. CROX significantly outperformed SP500 index in Nov 2018, when it returned +35.35% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. CROX had a shorter streak of profitable months than SP500 index. It only went up in 3 straight months during the last year.
If you have trouble imagining a 20% loss in the stock market, you shouldn't be in stocks.
-- John Bogle
CROX 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 CROX's volatility from 24 Sep, 2018 to 8 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 CROX 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.
SP500 index has more chance of extreme outcomes than CROX. Therefore, SP500 must receive a lower allocation than CROX in your portfolio. SP500 index usually has shorter drawdown period than CROX.
On a general note (since you are interested in CROX), two instruments that have been extremely volatile in recent times are OPNT and VIPS. Investors in these instruments should consider reducing their exposure (to OPNT and VIPS) and diversifying their portfolios.
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