42.59 -1.09 (-2.56%) Buy

FSLR investors herd to book profits while the going is good

13 min read

FIRST SOLAR, INC. ranked among the worst performers on Friday. It delivered -2.56% to close at 42.59. It is currently trading -45% below it's 52 week high of 77.95.

[Themes containing FSLR]

FSLR is currently in a bullish trend. Over the last three months trading long signals has not been a profitable strategy for FSLR's investors in general. However, this strategy had significantly lower risk when compared to Buy-and-Hold investing (which returned -11.57%). It is therefore better to tread with caution in the current uptrend by limiting your allocation to FSLR.


FSLR has been outperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 29 Feb, 2016 to 3 Apr, 2017. Over the last 2 years 11 months and 3 days, FSLR underperformed the SP500 index on 51% days.

During the last three months FSLR was mostly loss making and delivered on average -0.16% per day. It's best return during this period (of +7.76%) was on Tuesday, 30 Oct, 2018. While it's worst loss in the same period (of -9.52%) was on Friday, 26 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 -11.36% of investor capital.

The last 12 months saw FSLR's investors making profits in 3 months and incurring losses in 9 months. FSLR was less consistent in delivering monthly returs than SP500 index. FSLR was also a more risky investment than SP500 index as it's worst month in the last year, Jun 2018, returned -22.11% compared to -7.28% returned by SP500 index in Oct 2018. FSLR had a longer winning streak of losing months than SP500 index. It went down in 6 straight months (from May 2018 to Oct 2018) during which period it delivered -50.29%. It is interesting to note that both FSLR and SP500 index significantly outperform during months when quarterly/annual results are announced.

"After two decades of personal finance reporting, I've heard every excuse in the book for not saving money. That said, none of them really hold up - at least over the long term.

FSLR is currently seeing overall fall in volatility. In comparison, the SP500 index is seeing increase in volatility. During the last three months, there was a significant surge in FSLR's volatility from 10 Sep, 2018 to 31 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 FSLR has significant negative skewness in it's return distribution. This indicates that FSLR is very risky for short-term investment and can significantly underperform for long durations.

Investors trading in FSLR 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 FSLR. Therefore, SP500 must receive a lower allocation than FSLR in your portfolio. SP500 index usually has shorter drawdown period than FSLR.

Based on your interest in FSLR you may find it interesting to know that I and NIHD have both shown remarkable performance this year and deserve to be on every investors' watchlist.

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