DEERE & CO

147.0 -0.03 (-0.02%) Buy

DE investors doing a reality check

13 min read

DEERE & CO significantly underperformed on Tuesday. It lost -0.02% to close at 147.0. It is currently trading -14% below it's 52 week high of 171.49.

[Themes containing DE]

Buy-and-Hold investors in DE experienced a maximum drawdown of -17.53% over the last three months. It lost -1.26% during this down trending period. There were both Long and Short signals during this period, while the long signals were marginally more profitable than the short signals.

Trend

DE has been outperforming the SP500 index in recent time. Over the last 2 years 11 months and 7 days, DE outperformed the SP500 index on 54% days.

During the last three months DE was mostly loss making and delivered on average 0.0% per day. It's best return during this period (of +4.73%) was on Monday, 3 Dec, 2018. While it's worst loss in the same period (of -6.55%) was on Tuesday, 4 Dec, 2018. There was initially a bearish trend during this period which started on 17 Oct, 2018 and went on till 24 Oct, 2018. The trend delivered -12.44% losses to investors. This was followed by a bullish trend that started on 30 Oct, 2018 and ended on 7 Nov, 2018. This bullish trend delivered +12.99% to investors.

DE had 5 profitable and 7 loss making months over the last year. During the last year, DE underperformed SP500 index on monthly return basis. DE significantly outperformed SP500 index in Nov 2018, when it returned +14.35% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. DE had a longer winning streak of losing months than SP500 index. It went down in 3 straight months (from Feb 2018 to Apr 2018) during which period it delivered -17.64%.

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DE 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 DE's volatility from 13 Sep, 2018 to 7 Dec, 2018. While there was a significant surge in the SP500 index's volatility from 13 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that DE 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.

Investors trading in DE derivatives at this moment can consider 'Bear Put Spread' options strategy to receive better risk-adjusted returns.

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

Based on your interest in DE you may find it interesting to know that AAXN is a small cap that has shown remarkable performance and deserves to be on every investors' watchlist.

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