31.22 -0.26 (-0.83%) Sell

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

13 min read

COOPER TIRE & RUBBER CO delivered massive losses today. It returned -0.83% to close at 31.22. During the last week it grew by +2.06% and saw a maximum drawdown of -0.83% before bouncing back.

[Themes containing CTB]

CTB is currently in a down trend. The previous short signal in CTB has not been profitable for investors in general. If you are short on CTB at current levels please make sure that your allocation is limited and that your portfolio is well diversified.


CTB has been outperforming the SP500 index in recent time. Over the last 2 years 11 months and 10 days, CTB underperformed the SP500 index on 52% days.

During the last three months CTB delivered losses on 54% days. However, it still managed to end this period in a profit. It's best return during this period (of +21.38%) was on Monday, 29 Oct, 2018. While it's worst loss in the same period (of -6.55%) was on Wednesday, 10 Oct, 2018. There was initially a bearish trend during this period which started on 21 Sep, 2018 and went on till 28 Sep, 2018. The trend delivered -7.26% 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 +27.3% to investors.

On monthly basis, CTB delivered profits in more months over the last year, than losses. CTB delivered profits less regularly than SP500 index. CTB was also a more risky investment than SP500 index as it's worst month in the last year, Feb 2018, returned -19.82% compared to -7.28% returned by SP500 index in Oct 2018. CTB had a shorter streak of profitable months than SP500 index. It only went up in 4 straight months during the last year. It is interesting to note that both CTB and SP500 index significantly outperform during months when quarterly/annual results are announced.

Success is walking from failure to failure with no loss of enthusiasm.
-- Winston Churchill

CTB 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 CTB's volatility from 17 Sep, 2018 to 29 Oct, 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 CTB 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 CTB. Therefore, SP500 must receive a lower allocation than CTB in your portfolio. SP500 index usually has shorter drawdown period than CTB.

On a general note (since you are interested in CTB), two small cap instruments that deserve special mention are PTC and ZBRA. They have significantly outperformed the overall market.

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