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

INTERNATIONAL PAPER CO ranked among the worst performers today. It lost -2.67% to close at 43.08. It's recent 5 day performance has been +0.27%, -0.38%, -1.01%, -0.8% and -1.78%.

[Themes containing IP]

IP showed a strong down trend over the last 3 months. During this period IP lost -19.08% and saw a maximum drawdown of -27.28%. There were 4 short signals during this period that returned a cumulative of +8.93% to investors.

Trend

Monthly Performance

Alpha (outperformance)

Heatmap

Volatility

Return distribution

IP has been underperforming the SP500 index in recent time, after having outperformed till 25 Jan, 2017. Over the last 2 years 11 months and 9 days, IP underperformed the SP500 index on 48% days. Which indicates that on days IP underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months IP was mostly loss making and delivered on average -0.31% per day. It's best return during this period (of +10.25%) was on Thursday, 25 Oct, 2018. While it's worst loss in the same period (of -5.68%) was on Tuesday, 9 Oct, 2018. There was initially a bullish trend during this period which started on 14 Sep, 2018 and went on till 20 Sep, 2018. The bullish trend returned +2.49% to investors. This was followed by a bearish trend that started on 21 Sep, 2018 and ended on 28 Sep, 2018. This bearish trend lost -10.35% of investor capital.

IP had 5 profitable and 7 loss making months over the last year. During the last year, IP underperformed SP500 index on monthly return basis. IP was also a more risky investment than SP500 index as it's worst month in the last year, Mar 2018, returned -10.34% compared to -7.28% returned by SP500 index in Oct 2018. IP had a longer winning streak of losing months than SP500 index. It went down in 3 straight months (from Aug 2018 to Oct 2018) during which period it delivered -17.94%. It is interesting to note that both IP and SP500 index significantly outperform during months when quarterly/annual results are announced.

What we really want to do is what we are really meant to do. When we do what we are meant to do, money comes to us, doors open for us, we feel useful, and the work we do feels like play to us.
-- Julia Cameron

IP is becoming less volatile overall. In comparison, the SP500 index is seeing a rise in volatility. During the last three months, there was a significant surge in IP's volatility from 20 Sep, 2018 to 29 Oct, 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 IP has significant positive skewness in it's return distribution. This indicates that investors can expect IP to recover from drawdowns quickly. Which makes IP a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

Investors trading in IP derivatives at this moment can consider 'Covered Call' options strategy to receive better risk-adjusted returns.

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

Based on your interest in IP you may find it interesting to know that CSCO, PFE and UNH are large caps that have all shown remarkable performance and qualify to be on every investor's watchlist.