6.26 -0.2 (-3.25%) Sell

Don't even consider investing in LPG now, it is a really dangerous investment now

13 min read

DORIAN LPG LTD. was among the worst performers on Friday. It returned -3.25% to close at 6.26 which is it's 52 week low, down -28% from it's 52 week high.

[Themes containing LPG]

LPG showed a strong down trend over the last 3 months. During this period LPG returned -12.81% and saw a maximum drawdown of -24.76%. There were 2 short signals during this period that returned a cumulative of +5.07% to investors.


LPG has been underperforming the SP500 index in recent time, after having outperformed till 7 Mar, 2016. Over the last 2 years 11 months and 10 days, LPG underperformed the SP500 index on 49% days. Which indicates that on days LPG underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months LPG delivered profits on 52% days. However, it still managed to end this period in a loss. It's best return during this period (of +4.91%) was on Wednesday, 21 Nov, 2018. While it's worst loss in the same period (of -8.32%) was on Friday, 9 Nov, 2018. There was initially a bullish trend during this period which started on 17 Sep, 2018 and went on till 20 Sep, 2018. The bullish trend returned +8.31% to investors. This was followed by a bearish trend that started on 4 Dec, 2018 and ended on 10 Dec, 2018. This bearish trend lost -8.21% of investor capital.

On monthly basis, LPG delivered losses in more months over the last year, than profits. LPG delivered profits less regularly than SP500 index. LPG significantly outperformed SP500 index in Jul 2018, when it returned +14.09% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. LPG had a longer winning streak of losing months than SP500 index. It went down in 3 straight months (from Oct 2018 to Dec 2018) during which period it delivered -24.73%. It is interesting to note that both LPG and SP500 index significantly outperform during months when quarterly/annual results are announced.

"A bull market is very much like being in love. You don't realise its value till It's gone.

LPG 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 fall in LPG's volatility from 18 Sep, 2018 to 23 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 LPG has negative skewness in it's return distribution. This indicates that investors may need to stay invested through long periods of drawdown before expecting a recovery.

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

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

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