9.81 -0.28 (-2.87%) Sell

The party never started for GFN investors as it destroyed investor wealth

13 min read

GENERAL FINANCE CORP was among the worst performers on Friday. It returned -2.87% to close at 9.81. It is currently trading -38% below it's 52 week high of 16.0.

[Themes containing GFN]

GFN is currently in a down trend. The current bearish signal has generated a profit of +25.96% for investors in the last three months.


GFN has been underperforming the SP500 index in recent time, after having outperformed till 1 Oct, 2018. Over the last 2 years 11 months and 10 days, GFN outperformed the SP500 index on 51% days.

During the last three months GFN was mostly loss making and delivered on average -0.56% per day. It's best return during this period (of +7.56%) was on Wednesday, 7 Nov, 2018. While it's worst loss in the same period (of -8.11%) was on Tuesday, 4 Dec, 2018. There was initially a bullish trend during this period which started on 20 Sep, 2018 and went on till 1 Oct, 2018. The bullish trend returned +13.17% to investors. This was followed by a bearish trend that started on 4 Dec, 2018 and ended on 11 Dec, 2018. This bearish trend lost -29.75% of investor capital.

On monthly basis, GFN delivered profits in more months over the last year, than losses. GFN delivered profits less regularly than SP500 index. GFN significantly outperformed SP500 index in Apr 2018, when it returned +32.39% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. GFN had a longer winning streak of profitable months than SP500 index. It went up in 7 straight months (from Jan 2018 to Jul 2018) during which period it delivered +79.29%.

If all the economists were laid end to end, they'd never reach a conclusion.
-- George Bernard Shaw

GFN is becoming more volatile overall. In comparison, the SP500 index is seeing a rise in volatility. During the last three months, there was a significant fall in GFN's volatility from 17 Sep, 2018 to 4 Oct, 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 GFN has negative skewness in it's return distribution. This indicates that investors may need to stay invested through long periods of drawdown before expecting a recovery.

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

On a general note (since you are interested in GFN), two instruments that deserve special mention are NFEC and PRQR. They have significantly outperformed the overall market this year.

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