121.71 -1.37 (-1.13%) Sell

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

13 min read

IPG PHOTONICS CORP significantly underperformed today. It delivered -1.13% to close at 121.71. It's recent 5 day performance has been -1.01%, -5.35%, -4.26%, -7.39% and +4.24%.

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IPGP showed a strong bearish trend over the last 3 months. During this period IPGP delivered -23.08% and saw a maximum drawdown of -28.13%. There were 2 short signals during this period that returned a cumulative of +13.72% to investors.


IPGP has been underperforming the SP500 index in recent time. It showed significant outperformance (compared to the SP500 index) from 6 Jul, 2016 to 19 Jan, 2018. Over the last 2 years 11 months and 7 days, IPGP outperformed the SP500 index on 55% days.

IPGP returned losses on 55% days in the last three months. During this time, it delivered on average -0.36% per day. It delivered it's worst daily return of -13.8%, during this period, on Friday, 5 Oct, 2018. The longest stort-term trend during this period was 5 losing days, which started on 4 Dec, 2018 and ended on 11 Dec, 2018. This bearish trend lost -19.14% of investor capital.

The last 12 months saw IPGP's investors making profits in 4 months and incurring losses in 8 months. IPGP was less consistent in delivering monthly returs than SP500 index. IPGP was also a more risky investment than SP500 index as it's worst month in the last year, Jul 2018, returned -26.29% compared to -7.28% returned by SP500 index in Oct 2018. IPGP had a longer winning streak of losing months than SP500 index. It went down in 3 straight months (from Feb 2018 to Apr 2018) during which period it delivered -12.78%.

Everyday is a bank account, and time is our currency. No one is rich, no one is poor, we've got 24 hours each.
-- Christopher Rice

IPGP 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 IPGP's volatility from 14 Sep, 2018 to 30 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 IPGP has significant positive skewness in it's return distribution. This indicates that investors can expect IPGP to recover from drawdowns quickly. Which makes IPGP 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 IPGP. Therefore, SP500 must receive a lower allocation than IPGP in your portfolio. IPGP usually has shorter drawdown period than the SP500 index.

On a general note (since you are interested in IPGP), three instruments that are extremely volatile are OPNT, ICPT and IMTE. They must all be evaluated prudently and investors are better off avoiding them at the moment.

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