22.19 -1.53 (-6.88%) Sell

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

13 min read

GLNG delivered massive losses today. On a longer term basis, investors in GOLAR LNG LTD (Foreign) made +0.02% per day. Tuesday's performance of -6.88% was a significant underperformance compared to it's daily average.

[Themes containing GLNG]

Buy-and-Hold investors in GLNG experienced a maximum drawdown of -25.34% over the last three months. It lost -18.36% during this strong down trending period. There were both Long and Short signals during this period, where the short signals were significantly more profitable than the long signals. The net profit from Short signals was +4.04%.


GLNG has been underperforming the SP500 index in recent time, after having outperformed till 8 May, 2018. Over the last 2 years 11 months and 14 days, GLNG outperformed the SP500 index on 49% days. Which indicates that on days GLNG outperforms the SP500 index, it's performance is marginally better than on the days it underperforms the SP500 index.

During the last three months GLNG was mostly loss making and delivered on average -0.28% per day. It's best return during this period (of +6.35%) was on Thursday, 1 Nov, 2018. While it's worst loss in the same period (of -9.33%) was on Tuesday, 20 Nov, 2018. There was initially a bullish trend during this period which started on 30 Oct, 2018 and went on till 6 Nov, 2018. The bullish trend returned +15.82% to investors. This was followed by a bearish trend that started on 7 Nov, 2018 and ended on 14 Nov, 2018. This bearish trend lost -13.68% of investor capital.

GLNG had 4 profitable and 8 loss making months over the last year. During the last year, GLNG underperformed SP500 index on monthly return basis. GLNG significantly outperformed SP500 index in Apr 2018, when it returned +19.43% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. GLNG had a longer winning streak of losing months than SP500 index. It went down in 3 straight months (from Oct 2018 to Dec 2018) during which period it delivered -22.62%.

Money won't create success, the freedom to make it will.
-- Nelson Mandela

GLNG 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 GLNG's volatility from 9 Oct, 2018 to 5 Nov, 2018. While there was a significant surge in the SP500 index's volatility from 19 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that GLNG has significant negative skewness in it's return distribution. This indicates that GLNG is very risky for short-term investment and can significantly underperform for long durations.

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

On a general note (since you are interested in GLNG), three instruments that are extremely volatile are IX, GNK and VIPS. They must all be evaluated prudently and investors are better off avoiding them at the moment.

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