7.97 -0.05 (-0.62%) Sell

Doubt in the minds of GZT investors as it significantly underperforms

13 min read

GAZIT-GLOBE LTD (Foreign) is a falling knife that can bleed you if you catch it on Thursday. It fell by -0.62% to close at 7.97. It is currently trading -27% below it's 52 week high of 10.96.

[Themes containing GZT]

Buy-and-Hold investors in GZT experienced a maximum drawdown of -17.22% over the last three months. It fell by -13.93% during this strong bearish 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 +9.18%.


GZT has been outperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 26 Aug, 2016 to 3 Dec, 2018. Over the last 2 years 11 months and 9 days, GZT underperformed the SP500 index on 49% days. Which indicates that on days GZT underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

GZT returned losses on 69% days in the last three months. During this time, it delivered on average -0.23% per day. It delivered it's best daily return of +3.43%, during this period, on Thursday, 27 Sep, 2018. The longest stort-term trends during this period were 3 profitable and losing days. The bullish trend (which returned +2.62%) started on 19 Sep, 2018 and went on till 21 Sep, 2018 while the bearish trend (which returned -4.1%) started on 24 Sep, 2018 and went on till 26 Sep, 2018.

During the last year GZT had 2 profitable months and 10 loss making months. GZT returned profits in fewer months than SP500 index. GZT was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -9.44% compared to -7.28% returned by SP500 index in Oct 2018. GZT had a longer winning streak of losing months than SP500 index. It went down in 5 straight months (from Aug 2018 to Dec 2018) during which period it delivered -17.03%.

The secret to investing is to figure out the value of something - and then pay a lot less.
-- Joel Greenblatt

GZT is currently seeing overall increase in volatility. In comparison, the SP500 index is seeing increase in volatility. During the last three months, there was a significant fall in GZT's volatility from 17 Sep, 2018 to 23 Nov, 2018. While there was a significant surge in the SP500 index's volatility from 14 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that GZT 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.

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

On a general note (since you are interested in GZT), three instruments that deserve special mention are ~SMALLCAP, NSPR and AYTU. They have all outperformed the market and must be closely watched for investment opportunities.

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