FOSSIL GROUP, INC.

15.99 -0.96 (-6.0%) Sell

FOSL is a falling knife, continues to bleed every investor trying to catch it

13 min read

FOSSIL GROUP, INC. delivered massive losses on Thursday. It delivered -6.0% to close at 15.99. On a day when the overall market breadth was 35%, it closed higher than 88% of the market. In comparison, the benchmark SP500 index closed today at -0.0002%.

[Themes containing FOSL]

Buy-and-Hold investors in FOSL experienced a maximum drawdown of -34.71% over the last three months. It delivered -34.71% during this strong bearish trending period. There were no long signals during this period, where the short signal generated good profits of +34.71% for investors.

Trend

FOSL has been underperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 4 Mar, 2016 to 1 Feb, 2018. Over the last 2 years 11 months and 9 days, FOSL underperformed the SP500 index on 48% days. Which indicates that on days FOSL underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months FOSL delivered profits on 50% days. However, it still managed to end this period in a loss. It's best return during this period (of +10.07%) was on Thursday, 25 Oct, 2018. While it's worst loss in the same period (of -14.0%) was on Friday, 9 Nov, 2018. The longest stort-term trend during this period was 4 losing days, which started on 4 Dec, 2018 and ended on 10 Dec, 2018. This bearish trend lost -20.5% of investor capital.

The last 12 months saw FOSL's investors making profits in 6 months and incurring losses in 6 months. FOSL was less consistent in delivering monthly returs than SP500 index. FOSL significantly outperformed SP500 index in Feb 2018, when it returned +68.09% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. FOSL 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 FOSL and SP500 index significantly outperform during months when quarterly/annual results are announced.

Making money from enforcing patents is no more wrong than investing in preferred stock.
-- Nathan Myhrvold

FOSL 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 FOSL's volatility from 18 Sep, 2018 to 1 Oct, 2018. While there was a significant surge in the SP500 index's volatility from 14 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that FOSL has significant negative skewness in it's return distribution. This indicates that FOSL is very risky for short-term investment and can significantly underperform for long durations.

Investors trading in FOSL derivatives at this moment can consider 'Protective Collar' options strategy to receive better risk-adjusted returns.

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

On a general note (since you are interested in FOSL), two large cap instruments that deserve special mention are MSFT and PFE. They have significantly outperformed the overall market.

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