GENERAL MILLS INC

38.48 -1.21 (-3.15%) Sell

Stop-loss on the minds of GIS investors as it delivered massive losses

13 min read

GENERAL MILLS INC delivered massive losses today. It lost -3.15% to close at 38.48. During the last week it lost -9.05% and saw a maximum drawdown of -9.05%.

[Themes containing GIS]

GIS is currently in a down trend. Over the last three months 3 bearish signals have generated a profit of +0.34% for investors.

Trend

GIS has been underperforming the SP500 index in recent time, after having outperformed till 6 Jul, 2016. Over the last 2 years 11 months and 3 days, GIS underperformed the SP500 index on 51% days.

GIS returned losses on 51% days in the last three months. During this time, it delivered on average -0.31% per day. It delivered it's worst daily return of -7.62%, during this period, on Tuesday, 18 Sep, 2018. There was initially a bearish trend during this period which started on 24 Sep, 2018 and went on till 1 Oct, 2018. The trend delivered -4.08% losses to investors. This was followed by a bullish trend that started on 5 Nov, 2018 and ended on 12 Nov, 2018. This bullish trend delivered +8.08% to investors.

GIS had 3 profitable and 9 loss making months over the last year. During the last year, GIS underperformed SP500 index on monthly return basis. GIS was also a more risky investment than SP500 index as it's worst month in the last year, Feb 2018, returned -13.57% compared to -7.28% returned by SP500 index in Oct 2018. GIS had a longer winning streak of losing months than SP500 index. It went down in 5 straight months (from Jan 2018 to May 2018) during which period it delivered -29.47%. It is interesting to note that both GIS and SP500 index significantly outperform during months when quarterly/annual results are announced.

I have probably purchased fifty 'hot tips' in my career, maybe even more. When I put them all together, I know I am a net loser.
-- Charles Schwab

GIS 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 surge in GIS's volatility from 17 Sep, 2018 to 2 Nov, 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 GIS has significant positive skewness in it's return distribution. This indicates that investors can expect GIS to recover from drawdowns quickly. Which makes GIS 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 GIS. Therefore, SP500 must receive a lower allocation than GIS in your portfolio. GIS usually has shorter drawdown period than the SP500 index.

On a general note (since you are interested in GIS), if you are evaluating GIS as an investment candidate, then you should read about IEX which has delivered similar performance and can help diversify your portfolio.

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