GEL is a falling knife, continues to bleed every investor trying to catch it
14 Dec, 201813 min read
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GENESIS ENERGY LP has destroyed investor wealth today. It delivered -1.34% to close at 21.42. It's recent 5 day performance has been +2.16%, -1.07%, -0.09%, -3.59% and -0.84%.
GEL is currently in a bearish trend. The current bearish signal has generated a profit of +5.68% for investors in the last three months.
GEL has been outperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 2 Jun, 2016 to 23 Feb, 2018. Over the last 2 years 11 months and 10 days, GEL underperformed the SP500 index on 51% days.
GEL returned losses on 62% days in the last three months. During this time, it delivered on average -0.19% per day. It delivered it's worst daily return of -4.39%, during this period, on Tuesday, 20 Nov, 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 -7.79% of investor capital.
The last 12 months saw GEL's investors making profits in 5 months and incurring losses in 7 months. GEL was less consistent in delivering monthly returs than SP500 index. GEL was also a more risky investment than SP500 index as it's worst month in the last year, Feb 2018, returned -13.33% compared to -7.28% returned by SP500 index in Oct 2018. GEL had a longer winning streak of losing months than SP500 index. It went down in 4 straight months (from Sep 2018 to Dec 2018) during which period it delivered -12.96%. It is interesting to note that both GEL and SP500 index significantly outperform during months when quarterly/annual results are announced.
The hardest thing to understand in the world is the income tax.
-- Albert Einstein
GEL 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 GEL's volatility from 21 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 GEL has significant positive skewness in it's return distribution. This indicates that investors can expect GEL to recover from drawdowns quickly. Which makes GEL 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 GEL. Therefore, SP500 must receive a lower allocation than GEL in your portfolio. SP500 index usually has shorter drawdown period than GEL.
Based on your interest in GEL you may find it interesting to know that MSFT and CSCO are both large caps that have shown remarkable performance and deserve to be on every investors' watchlist.
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