12.97 -0.57 (-4.42%) Sell

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

13 min read

HBI was among the worst performers today. On a longer term basis, investors in HANESBRANDS INC. made -0.03% per day. Monday's performance of -4.42% was a underperformance compared to it's daily average.

[Themes containing HBI]

HBI showed a strong bearish trend over the last 3 months. During this period HBI delivered -28.3% and saw a maximum drawdown of -30.64%. There was a short signal during this period which returned +28.3%.


HBI has been underperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 1 Feb, 2016 to 4 Oct, 2018. Over the last 2 years 11 months and 10 days, HBI underperformed the SP500 index on 51% days.

HBI returned losses on 59% days in the last three months. During this time, it delivered on average -0.5% per day. It delivered it's worst daily return of -6.63%, during this period, on Thursday, 13 Dec, 2018. The longest stort-term trend during this period was 7 losing days, which started on 7 Dec, 2018 and ended on 17 Dec, 2018. This bearish trend lost -18.69% of investor capital.

The last 12 months saw HBI's investors making profits in 5 months and incurring losses in 7 months. HBI was less consistent in delivering monthly returs than SP500 index. HBI was also a more risky investment than SP500 index as it's worst month in the last year, Aug 2018, returned -21.2% compared to -7.28% returned by SP500 index in Oct 2018. HBI 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 -26.44%. It is interesting to note that both HBI and SP500 index significantly outperform during months when quarterly/annual results are announced.

"The underlying principles of sound investment should not alter from decade to decade, but the application of these principles must be adapted to significant changes in the financial mechanisms and climate.

HBI 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 surge in HBI's volatility from 21 Sep, 2018 to 5 Nov, 2018. While there was a significant surge in the SP500 index's volatility from 25 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that HBI has significant positive skewness in it's return distribution. This indicates that investors can expect HBI to recover from drawdowns quickly. Which makes HBI 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 HBI. Therefore, SP500 must receive a lower allocation than HBI in your portfolio. HBI usually has shorter drawdown period than the SP500 index.

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

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