FCAU investors incur serious losses
07 Dec, 201813 min read
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FIAT CHRYSLER AUTOMOBILES N.V. (Foreign) was among the worst performers on Friday. It delivered -4.13% to close at 15.34. It is currently trading -38% below it's 52 week high of 24.81.
FCAU is currently in a bearish trend. The current bearish signal has generated a profit of +9.18% for investors in the last three months.
FCAU has been underperforming the SP500 index in recent time. It showed significant outperformance (compared to the SP500 index) from 6 Jul, 2016 to 18 Apr, 2018. Over the last 2 years 11 months and 3 days, FCAU outperformed the SP500 index on 48% days. Which indicates that on days FCAU outperforms the SP500 index, it's performance is marginally better than on the days it underperforms the SP500 index.
During the last three months FCAU was mostly loss making and delivered on average -0.12% per day. It's best return during this period (of +6.76%) was on Monday, 26 Nov, 2018. While it's worst loss in the same period (of -8.08%) was on Wednesday, 24 Oct, 2018. The longest stort-term trend during this period was 7 losing days, which started on 2 Oct, 2018 and ended on 10 Oct, 2018. This bearish trend lost -10.62% of investor capital.
The last 12 months saw FCAU's investors making profits in 6 months and incurring losses in 6 months. FCAU was less consistent in delivering monthly returs than SP500 index. FCAU significantly outperformed SP500 index in Jan 2018, when it returned +31.14% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. FCAU had a shorter streak of profitable months than SP500 index. It only went up in 2 straight months during the last year. It is interesting to note that both FCAU and SP500 index significantly outperform during months when quarterly/annual results are announced.
Investment philosophy is the clear understanding that by owning shares of stocks he owns businesses, not pieces of paper.
-- Warren Edward Buffett
FCAU 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 FCAU's volatility from 10 Sep, 2018 to 30 Oct, 2018. While there was a significant surge in the SP500 index's volatility from 10 Sep, 2018 to 29 Oct, 2018.
Advanced/professional short-term investors should note that FCAU 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 FCAU. Therefore, SP500 must receive a lower allocation than FCAU in your portfolio. SP500 index usually has shorter drawdown period than FCAU.
Based on your interest in FCAU you may find it interesting to know that ZBRA and EHC are both small caps that have shown remarkable performance and deserve to be on every investors' watchlist.
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