20.49 -0.15 (-0.73%) Sell

FMBI investors looking to cut their losses short

13 min read

FIRST MIDWEST BANCORP INC performed worse than the broader market today. It delivered -0.73% to close at 20.49. During the last week it delivered -3.85% and saw a maximum drawdown of -5.27% before bouncing back.

[Themes containing FMBI]

FMBI is currently in a bearish trend. Over the last three months 4 bearish signals have generated a profit of +14.53% for investors.


FMBI has been underperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 4 Jan, 2017 to 14 Dec, 2018. One must note that FMBI is currently at it's worst performance to the SP500 index which makes it a bad investment candidate. Over the last 2 years 11 months and 10 days, FMBI underperformed the SP500 index on 48% days. Which indicates that on days FMBI underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

FMBI returned losses on 54% days in the last three months. During this time, it delivered on average -0.38% per day. It delivered it's worst daily return of -5.57%, during this period, on Wednesday, 24 Oct, 2018. The longest stort-term trends during this period were 5 profitable and losing days. The bullish trend (which returned +6.82%) started on 29 Oct, 2018 and went on till 2 Nov, 2018 while the bearish trend (which returned -14.09%) started on 18 Oct, 2018 and went on till 24 Oct, 2018.

The last 12 months saw FMBI's investors making profits in 7 months and incurring losses in 5 months. FMBI was less consistent in delivering monthly returs than SP500 index. FMBI was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -12.53% compared to -7.28% returned by SP500 index in Oct 2018. FMBI 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 FMBI and SP500 index significantly outperform during months when quarterly/annual results are announced.

I will tell you the secret to getting rich on Wall Street. You try to be greedy when others are fearful. And you try to be fearful when others are greedy.
-- Warren Buffett

FMBI 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 FMBI's volatility from 18 Sep, 2018 to 14 Dec, 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 FMBI has significant positive skewness in it's return distribution. This indicates that investors can expect FMBI to recover from drawdowns quickly. Which makes FMBI a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

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

On a general note (since you are interested in FMBI), two instruments that deserve special mention are NSPR and AMRH. They have significantly outperformed the overall market.

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