96.67 -0.48 (-0.49%) Sell

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

13 min read

KSU was among the worst performers today. On a longer term basis, investors in KANSAS CITY SOUTHERN made -0.01% per day. Friday's performance of -0.49% was a significant underperformance compared to it's daily average.

[Themes containing KSU]

Buy-and-Hold investors in KSU experienced a maximum drawdown of -18.5% over the last three months. It returned -17.12% during this strong down trending period. There were both Long and Short signals during this period, where the short signals were significantly more profitable than the long signals. The net profit from Short signals was +11.74%.


KSU has been outperforming the SP500 index in recent time. Over the last 2 years 11 months and 10 days, KSU outperformed the SP500 index on 51% days.

KSU returned losses on 62% days in the last three months. During this time, it delivered on average -0.28% per day. It delivered it's worst daily return of -4.62%, during this period, on Wednesday, 10 Oct, 2018. There was initially a bearish trend during this period which started on 9 Oct, 2018 and went on till 12 Oct, 2018. The trend delivered -8.8% losses to investors. This was followed by a bullish trend that started on 30 Oct, 2018 and ended on 2 Nov, 2018. This bullish trend delivered +4.48% to investors.

On monthly basis, KSU delivered losses in more months over the last year, than profits. KSU delivered profits less regularly than SP500 index. KSU was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -12.57% compared to -7.28% returned by SP500 index in Oct 2018. KSU 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 -15.15%. It is interesting to note that both KSU and SP500 index significantly outperform during months when quarterly/annual results are announced.

If you are standing on the platform when the train has pulled away, It's not going to back up for you. When a bull market takes off, It's not going to back up for you.
-- Don Connelly

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

Investors trading in KSU 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 KSU. Therefore, SP500 must receive a lower allocation than KSU in your portfolio. KSU usually has shorter drawdown period than the SP500 index.

On a general note (since you are interested in KSU), three instruments that deserve special mention are NFEC, NIHD and ECYT. They have all outperformed the market and must be closely watched for investment opportunities.

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