47.49 -0.57 (-1.21%) Sell

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

13 min read

DONALDSON CO INC has destroyed investor wealth on Tuesday. It lost -1.21% to close at 47.49. It is currently trading -19% below it's 52 week high of 59.18.

[Themes containing DCI]

DCI showed a strong down trend over the last 3 months. During this period DCI lost -16.84% and saw a maximum drawdown of -19.75%. There was a short signal during this period which returned +9.39%.


DCI has been underperforming the SP500 index in recent time, after having outperformed till 14 Sep, 2018. Over the last 2 years 11 months and 7 days, DCI outperformed the SP500 index on 53% days.

During the last three months DCI was mostly loss making and delivered on average -0.27% per day. It's best return during this period (of +3.51%) was on Thursday, 1 Nov, 2018. While it's worst loss in the same period (of -9.51%) was on Tuesday, 4 Dec, 2018. There was initially a bearish trend during this period which started on 24 Sep, 2018 and went on till 2 Oct, 2018. The trend delivered -2.34% losses to investors. This was followed by a bullish trend that started on 30 Oct, 2018 and ended on 8 Nov, 2018. This bullish trend delivered +8.82% to investors.

DCI had 7 profitable and 5 loss making months over the last year. During the last year, DCI underperformed SP500 index on monthly return basis. DCI was also a more risky investment than SP500 index as it's worst month in the last year, Dec 2018, returned -15.26% compared to -7.28% returned by SP500 index in Oct 2018. DCI 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 DCI and SP500 index significantly outperform during months when quarterly/annual results are announced.

The difference between playing the stock market and the horses is that one of the horses must win.
-- Joey Adams

DCI 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 DCI's volatility from 28 Sep, 2018 to 7 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 DCI has significant positive skewness in it's return distribution. This indicates that investors can expect DCI to recover from drawdowns quickly. Which makes DCI a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

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

Based on your interest in DCI you may find it interesting to know that MSFT, V and PFE are large caps that have all shown remarkable performance and qualify to be on every investor's watchlist.

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