18.16 -0.22 (-1.2%) Buy

Search for alternative investments is on for HT investors as it underperforms

13 min read

HERSHA HOSPITALITY TRUST was among the worst performers on Thursday. It fell by -1.2% to close at 18.16. On a day when the overall market breadth was 35%, it closed higher than 68% of the market. In comparison, the benchmark SP500 index closed today at -0.0002%.

[Themes containing HT]

HT is currently in a bullish trend. The previous long signal in HT has not been profitable for investors in general. If you are invested in HT at current levels please make sure that your allocation is limited and that your portfolio is well diversified.


HT has been outperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 4 Mar, 2016 to 27 Feb, 2018. Over the last 2 years 11 months and 9 days, HT underperformed the SP500 index on 48% days. Which indicates that on days HT underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months HT was mostly loss making and delivered on average -0.38% per day. It's best return during this period (of +3.14%) was on Wednesday, 28 Nov, 2018. While it's worst loss in the same period (of -7.8%) was on Wednesday, 24 Oct, 2018. The longest stort-term trend during this period was 6 losing days, which started on 17 Oct, 2018 and ended on 24 Oct, 2018. This bearish trend lost -14.05% of investor capital.

During the last year HT had 8 profitable months and 4 loss making months. Profitable number of months of HT and SP500 index were the same. HT was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -21.57% compared to -7.28% returned by SP500 index in Oct 2018. HT and SP500 index, both had periods of 6 consecutive profitable months.

Don't tell me what you value, show me your budget, and I'll tell you what you value.
-- Joe Biden

HT 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 HT's volatility from 17 Sep, 2018 to 24 Oct, 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 HT has significant positive skewness in it's return distribution. This indicates that investors can expect HT to recover from drawdowns quickly. Which makes HT 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 HT. Therefore, SP500 must receive a lower allocation than HT in your portfolio. SP500 index usually has shorter drawdown period than HT.

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

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