FL investors herd to book profits while the going is good
14 Dec, 201813 min read
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FOOT LOCKER, INC. was among the worst performers today. It returned -1.36% to close at 49.26. It's recent 5 day performance has been -3.81%, -0.5%, 0.0%, +0.63% and +1.03%.
FL is currently in a up trend. The current bullish signal has generated a profit of +5.39% for FL's investors in the last three months.
FL has been outperforming the SP500 index in recent time. Over the last 2 years 11 months and 10 days, FL underperformed the SP500 index on 51% days.
During the last three months FL delivered losses on 53% days. However, it still managed to end this period in a profit. It's best return during this period (of +14.91%) was on Wednesday, 21 Nov, 2018. While it's worst loss in the same period (of -5.57%) was on Tuesday, 20 Nov, 2018. There was initially a bullish trend during this period which started on 25 Sep, 2018 and went on till 28 Sep, 2018. The bullish trend returned +7.22% to investors. This was followed by a bearish trend that started on 3 Dec, 2018 and ended on 14 Dec, 2018. This bearish trend lost -13.39% of investor capital.
On monthly basis, FL delivered losses in more months over the last year, than profits. FL delivered profits less regularly than SP500 index. FL significantly outperformed SP500 index in May 2018, when it returned +25.28% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. FL 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 -9.09%.
"One of the funny things about the stock market is that every time one person buys, another sells, and both think they are astute.
FL 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 FL's volatility from 20 Sep, 2018 to 20 Nov, 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 FL 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 FL. Therefore, SP500 must receive a lower allocation than FL in your portfolio. SP500 index usually has shorter drawdown period than FL.
On a general note (since you are interested in FL), two instruments that have delivered similar performance as FL are DAR and MTRN. They are suitable as good alternative investment candidates that can diversify your portfolio.
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