FOSTER L B CO

18.07 -0.07 (-0.39%) Sell

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

13 min read

FOSTER L B CO significantly underperformed on Tuesday. It lost -0.39% to close at 18.07. On a day when the overall market breadth was 35%, it closed higher than 15% of the market. In comparison, the benchmark SP500 index closed today at -0.0004%.

[Themes containing FSTR]

FSTR showed a strong down trend over the last 3 months. During this period FSTR lost -17.11% and saw a maximum drawdown of -25.69%. There were 3 short signals during this period that returned a cumulative of +12.62% to investors.

Trend

FSTR has been underperforming the SP500 index in recent time, after having outperformed till 27 Feb, 2018. Over the last 2 years 11 months and 7 days, FSTR outperformed the SP500 index on 49% days. Which indicates that on days FSTR outperforms the SP500 index, it's performance is marginally better than on the days it underperforms the SP500 index.

During the last three months FSTR was mostly loss making and delivered on average -0.24% per day. It's best return during this period (of +18.08%) was on Friday, 2 Nov, 2018. While it's worst loss in the same period (of -7.89%) was on Tuesday, 4 Dec, 2018. There was initially a bullish trend during this period which started on 13 Sep, 2018 and went on till 21 Sep, 2018. The bullish trend returned +4.75% to investors. This was followed by a bearish trend that started on 24 Sep, 2018 and ended on 2 Oct, 2018. This bearish trend lost -15.16% of investor capital.

FSTR had 4 profitable and 8 loss making months over the last year. During the last year, FSTR underperformed SP500 index on monthly return basis. FSTR was also a more risky investment than SP500 index as it's worst month in the last year, Mar 2018, returned -9.94% compared to -7.28% returned by SP500 index in Oct 2018. FSTR had a longer winning streak of losing months than SP500 index. It went down in 3 straight months (from Aug 2018 to Oct 2018) during which period it delivered -25.73%. It is interesting to note that both FSTR and SP500 index significantly outperform during months when quarterly/annual results are announced.

The challenge is not to pick the best investment. The challenge is to pick the right investment.
-- Don Connelly

FSTR is becoming less volatile overall. In comparison, the SP500 index is seeing a rise in volatility. During the last three months, there was a significant surge in FSTR's volatility from 13 Sep, 2018 to 23 Oct, 2018. While there was a significant surge in the SP500 index's volatility from 13 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that FSTR has significant positive skewness in it's return distribution. This indicates that investors can expect FSTR to recover from drawdowns quickly. Which makes FSTR a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

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

Based on your interest in FSTR you may find it interesting to know that AMZN, MSFT and PFE are large caps that have all shown remarkable performance and qualify to be on every investor's watchlist.

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