26.47 -0.16 (-0.6%) Sell

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

13 min read

LUMINEX CORP ranked among the worst performers on Tuesday. It returned -0.6% to close at 26.47. On a day when the overall market breadth was 35%, it closed higher than 15% of the market. In comparison, the benchmark SP500 index closed today at -0.0004%.

[Themes containing LMNX]

LMNX showed a down trend over the last 3 months. During this period LMNX returned -9.81% and saw a maximum drawdown of -14.98%. There were 4 short signals during this period that returned a cumulative of +4.29% to investors.


LMNX has been underperforming the SP500 index in recent time, after having outperformed till 1 Aug, 2018. Over the last 2 years 11 months and 7 days, LMNX underperformed the SP500 index on 46% days. Which indicates that on days LMNX underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months LMNX delivered profits on 53% days. However, it still managed to end this period in a loss. It's best return during this period (of +6.62%) was on Wednesday, 7 Nov, 2018. While it's worst loss in the same period (of -11.99%) was on Tuesday, 6 Nov, 2018. There was initially a bullish trend during this period which started on 20 Nov, 2018 and went on till 3 Dec, 2018. The bullish trend returned +11.8% to investors. This was followed by a bearish trend that started on 4 Dec, 2018 and ended on 11 Dec, 2018. This bearish trend lost -11.66% of investor capital.

On monthly basis, LMNX delivered profits in more months over the last year, than losses. LMNX delivered profits less regularly than SP500 index. LMNX significantly outperformed SP500 index in May 2018, when it returned +32.65% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. LMNX had a shorter streak of profitable months than SP500 index. It only went up in 5 straight months during the last year.

I always said that if I wasn't studying psychopaths in prison, I'd do it at the stock exchange.
-- Robert D. Hare

LMNX 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 LMNX's volatility from 28 Sep, 2018 to 7 Nov, 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 LMNX has significant positive skewness in it's return distribution. This indicates that investors can expect LMNX to recover from drawdowns quickly. Which makes LMNX 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 LMNX. Therefore, SP500 must receive a lower allocation than LMNX in your portfolio. LMNX usually has shorter drawdown period than the SP500 index.

Based on your interest in LMNX you may find it interesting to know that I, NFEC and TNDM have all shown remarkable performance this year and deserve to be on every investor's watchlist.

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