FMC is a falling knife, continues to bleed every investor trying to catch it
14 Dec, 201813 min read
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FMC is a falling knife that can bleed you if you catch it today. On a longer term basis, investors in FMC CORP made -0.02% per day. Friday's performance of -1.3% was a underperformance compared to it's daily average.
FMC showed a strong bearish trend over the last 3 months. During this period FMC fell by -10.45% and saw a maximum drawdown of -18.21%. It has been unusually choppy during this period. Long term investors are better off avoiding investing in FMC till volatility reduces and a clear trend emerges.
FMC has been underperforming the SP500 index in recent time. It showed significant outperformance (compared to the SP500 index) from 25 Jan, 2016 to 16 Oct, 2017. Over the last 2 years 11 months and 10 days, FMC outperformed the SP500 index on 53% days.
FMC returned losses on 62% days in the last three months. During this time, it delivered on average -0.16% per day. It delivered it's worst daily return of -4.66%, during this period, on Wednesday, 24 Oct, 2018. The longest stort-term trend during this period was 6 losing days, which started on 17 Oct, 2018 and ended on 24 Oct, 2018. This bearish trend lost -11.72% of investor capital.
During the last year FMC had 6 profitable months and 6 loss making months. FMC returned profits in fewer months than SP500 index. FMC was also a more risky investment than SP500 index as it's worst month in the last year, Feb 2018, returned -14.07% compared to -7.28% returned by SP500 index in Oct 2018. FMC had a shorter streak of profitable months than SP500 index. It only went up in 4 straight months during the last year.
"You have venture capitalists. We view them as experts who also help finance your company and give directions and also some pretty candid discussions about what you have to do better.
FMC 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 FMC's volatility from 18 Sep, 2018 to 11 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 FMC has significant negative skewness in it's return distribution. This indicates that FMC is very risky for short-term investment and can significantly underperform for long durations.
SP500 index has more chance of extreme outcomes than FMC. Therefore, SP500 must receive a lower allocation than FMC in your portfolio. SP500 index usually has shorter drawdown period than FMC.
Based on your interest in FMC you may find it interesting to know that SYF and TMP have both performed similar to FMC and can be considered by investors as alternative investment options.
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