DOUGLAS EMMETT INC

35.53 -0.68 (-1.91%) Buy

DEI investors herd to book profits while the going is good

13 min read

DEI significantly underperformed today. On a longer term basis, investors in DOUGLAS EMMETT INC made -0.02% per day. Wednesday's performance of -1.91% was a underperformance compared to it's daily average.

[Themes containing DEI]

DEI showed a bearish trend over the last 3 months. During this period DEI delivered -8.29% and saw a maximum drawdown of -9.66%. There were 2 short signals during this period that returned a cumulative of +5.41% to investors.

Trend

DEI has been outperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 26 Sep, 2016 to 3 Oct, 2018. Over the last 2 years 11 months and 8 days, DEI underperformed the SP500 index on 49% days. Which indicates that on days DEI underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months DEI was mostly loss making and delivered on average -0.13% per day. It's best return during this period (of +2.45%) was on Thursday, 6 Dec, 2018. While it's worst loss in the same period (of -3.34%) was on Friday, 26 Oct, 2018. The longest stort-term trend during this period was 5 profitable days, which started on 21 Nov, 2018 and went on till 28 Nov, 2018. This bullish trend returned +3.76% to investors.

The last 12 months saw DEI's investors making profits in 6 months and incurring losses in 6 months. DEI was less consistent in delivering monthly returs than SP500 index. DEI was also a more risky investment than SP500 index as it's worst month in the last year, Feb 2018, returned -7.55% compared to -7.28% returned by SP500 index in Oct 2018. DEI had a shorter streak of profitable months than SP500 index. It only went up in 4 straight months during the last year.

Never spend your money before you have earned it.
-- Thomas Jefferson

DEI is currently seeing overall increase in volatility. In comparison, the SP500 index is seeing increase in volatility. During the last three months, there was a significant surge in DEI's volatility from 13 Sep, 2018 to 12 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 DEI has significant positive skewness in it's return distribution. This indicates that investors can expect DEI to recover from drawdowns quickly. Which makes DEI a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

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

Based on your interest in DEI you may find it interesting to know that OPNT is highly volatile and investors investing in it must take extreme caution. Consider either reducing your exposure to OPNT or sufficiently diversifying your portfolio.

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