16.74 -0.19 (-1.12%) Sell

Doubt in the minds of GTN investors as it destroyed investor wealth

13 min read

GRAY TELEVISION INC has destroyed investor wealth on Monday. It fell by -1.12% to close at 16.74. It is currently trading +55% above it's 52 week low of 10.75 and is down only -15% from it's 52 week high.

[Themes containing GTN]

GTN is currently in a bearish trend. Over the last three months trading short signals has not been a profitable strategy for GTN's investors in general. However, this strategy had significantly lower risk when compared to Buy-and-Hold investing (which returned -1.24%). It is therefore better to tread with caution in the current downtrend by limiting your allocation to GTN.


GTN has been underperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 4 Jan, 2016 to 4 Jun, 2018. Over the last 2 years 11 months and 10 days, GTN underperformed the SP500 index on 50% days. Which indicates that on days GTN underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

GTN returned losses on 54% days in the last three months. During this time, it delivered on average +0.01% per day. It delivered it's worst daily return of -6.48%, during this period, on Wednesday, 24 Oct, 2018. The longest stort-term trend during this period was 8 losing days, which started on 9 Nov, 2018 and ended on 20 Nov, 2018. This bearish trend lost -13.89% of investor capital.

During the last year GTN had 4 profitable months and 8 loss making months. GTN returned profits in fewer months than SP500 index. GTN significantly outperformed SP500 index in Jun 2018, when it returned +43.64% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. GTN 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 -35.32%.

"I do not regard a broker as a member of the human race.

GTN is currently seeing overall fall in volatility. In comparison, the SP500 index is seeing increase in volatility. During the last three months, there was a significant surge in GTN's volatility from 4 Oct, 2018 to 24 Oct, 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 GTN 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.

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

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

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