39.79 -0.47 (-1.19%) Sell

HLI investors incur serious losses

13 min read

HLI significantly underperformed today. On a longer term basis, investors in HOULIHAN LOKEY, INC. made -0.07% per day. Tuesday's performance of -1.19% was a underperformance compared to it's daily average.

[Themes containing HLI]

Buy-and-Hold investors in HLI experienced a maximum drawdown of -17.54% over the last three months. It delivered -15.43% during this strong bearish trending period. There were no long signals during this period, where the short signal generated good profits of +15.43% for investors.


HLI has been underperforming the SP500 index in recent time. It showed significant outperformance (compared to the SP500 index) from 6 Jul, 2016 to 22 Jun, 2018. Over the last 2 years 11 months and 7 days, HLI outperformed the SP500 index on 53% days.

HLI returned losses on 60% days in the last three months. During this time, it delivered on average -0.26% per day. It delivered it's worst daily return of -5.08%, during this period, on Tuesday, 4 Dec, 2018. The longest stort-term trend during this period was 7 losing days, which started on 17 Oct, 2018 and ended on 25 Oct, 2018. This bearish trend lost -11.11% of investor capital.

The last 12 months saw HLI's investors making profits in 5 months and incurring losses in 7 months. HLI was less consistent in delivering monthly returs than SP500 index. HLI significantly outperformed SP500 index in May 2018, when it returned +9.87% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. HLI had a longer winning streak of losing months than SP500 index. It went down in 4 straight months (from Jul 2018 to Oct 2018) during which period it delivered -21.93%. It is interesting to note that both HLI and SP500 index significantly outperform during months when quarterly/annual results are announced.

Formal education will make you a living; self-education will make you a fortune.
-- Jim Rohn

HLI 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 HLI's volatility from 2 Oct, 2018 to 26 Oct, 2018. While there was a significant surge in the SP500 index's volatility from 13 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that HLI has significant positive skewness in it's return distribution. This indicates that investors can expect HLI to recover from drawdowns quickly. Which makes HLI a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

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

On a general note (since you are interested in HLI), two large cap instruments that deserve special mention are CSCO and AMZN. They have significantly outperformed the overall market.

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