GENERAL MOTORS CO

34.9 +0.24 (+0.69%) Buy

GM continues to mint money for it's investors

13 min read

GENERAL MOTORS CO was among the best performers on Tuesday. It returned +0.69% to close at 34.9. On a day when the overall market breadth was 34%, it closed higher than 16% of the market. In comparison, the benchmark SP500 index closed today at +0.01%.

[Themes containing GM]

GM is currently in a up trend. Over the last three months Buy-and-Hold has been a better strategy (returning -2.32%) for GM's investors than trading long signals.

Trend

GM has been outperforming the SP500 index in recent time. Over the last 2 years 11 months and 14 days, GM underperformed the SP500 index on 49% days. Which indicates that on days GM underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months GM was mostly loss making and delivered on average -0.01% per day. It's best return during this period (of +9.09%) was on Wednesday, 31 Oct, 2018. While it's worst loss in the same period (of -5.02%) was on Tuesday, 4 Dec, 2018. There was initially a bearish trend during this period which started on 9 Oct, 2018 and went on till 12 Oct, 2018. The trend delivered -7.32% losses to investors. This was followed by a bullish trend that started on 25 Oct, 2018 and ended on 31 Oct, 2018. This bullish trend delivered +18.54% to investors.

GM had 5 profitable and 7 loss making months over the last year. During the last year, GM underperformed SP500 index on monthly return basis. GM significantly outperformed SP500 index in May 2018, when it returned +16.22% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. GM had a longer winning streak of losing months than SP500 index. It went down in 4 straight months (from Jun 2018 to Sep 2018) during which period it delivered -23.27%. It is interesting to note that both GM and SP500 index significantly outperform during months when quarterly/annual results are announced.

Believe you can and you're halfway there.
-- Theodore Roosevelt

GM 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 GM's volatility from 19 Sep, 2018 to 2 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 GM 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.

Investors trading in GM derivatives at this moment can consider 'Protective Collar' options strategy to receive better risk-adjusted returns.

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

On a general note (since you are interested in GM), three large cap instruments that deserve special mention are AMZN, CSCO and MSFT. They have all outperformed the market and must be closely watched for investment opportunities.

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