89.51 -3.06 (-3.42%) Sell

Don't invest in KLAC now, it is an investor's nightmare

13 min read

KLAC was among the worst performers today. On a longer term basis, investors in KLA TENCOR CORP made -0.03% per day. Friday's performance of -3.42% was a underperformance compared to it's daily average.

[Themes containing KLAC]

KLAC showed a strong bearish trend over the last 3 months. During this period KLAC fell by -13.32% and saw a maximum drawdown of -18.55%. There were 2 short signals during this period that returned a cumulative of +4.4% to investors.


KLAC has been underperforming the SP500 index in recent time. It showed significant outperformance (compared to the SP500 index) from 11 Aug, 2016 to 12 Mar, 2018. Over the last 2 years 11 months and 10 days, KLAC outperformed the SP500 index on 56% days.

During the last three months KLAC was mostly loss making and delivered on average -0.2% per day. It's best return during this period (of +7.6%) was on Tuesday, 30 Oct, 2018. While it's worst loss in the same period (of -5.35%) was on Wednesday, 10 Oct, 2018. The longest stort-term trend during this period was 6 losing days, which started on 4 Oct, 2018 and ended on 11 Oct, 2018. This bearish trend lost -11.16% of investor capital.

During the last year KLAC had 5 profitable months and 7 loss making months. KLAC returned profits in fewer months than SP500 index. KLAC significantly outperformed SP500 index in Jul 2018, when it returned +13.12% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. KLAC 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 -22.66%. It is interesting to note that both KLAC and SP500 index significantly outperform during months when quarterly/annual results are announced.

"Don't gamble; take all your savings and buy some good stock and hold it till it goes up, then sell it. If it don't go up, don't buy it.

KLAC 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 KLAC's volatility from 20 Sep, 2018 to 20 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 KLAC has significant positive skewness in it's return distribution. This indicates that investors can expect KLAC to recover from drawdowns quickly. Which makes KLAC 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 KLAC. Therefore, SP500 must receive a lower allocation than KLAC in your portfolio. SP500 index usually has shorter drawdown period than KLAC.

Based on your interest in KLAC you may find it interesting to know that NVCN is highly volatile and investors investing in it must take extreme caution. Consider either reducing your exposure to NVCN or sufficiently diversifying your portfolio.

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