MASTERCARD INC

195.33 -3.56 (-1.82%) Sell

The party never started for MA investors as it destroyed investor wealth

13 min read

MASTERCARD INC was among the worst performers on Friday. It returned -1.82% to close at 195.33. It is currently trading +29% above it's 52 week low of 150.53 and is down only -12% from it's 52 week high.

[Themes containing MA]

Buy-and-Hold investors in MA experienced a maximum drawdown of -18.4% over the last three months. It returned -9.77% during this 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 +0.69%.

Trend

MA has been outperforming the SP500 index in recent time. Over the last 2 years 11 months and 10 days, MA outperformed the SP500 index on 58% days.

During the last three months MA was mostly loss making and delivered on average -0.13% per day. It's best return during this period (of +5.29%) was on Wednesday, 31 Oct, 2018. While it's worst loss in the same period (of -6.23%) was on Wednesday, 10 Oct, 2018. There was initially a bullish trend during this period which started on 25 Sep, 2018 and went on till 1 Oct, 2018. The bullish trend returned +1.08% to investors. This was followed by a bearish trend that started on 9 Nov, 2018 and ended on 14 Nov, 2018. This bearish trend lost -5.49% of investor capital.

On monthly basis, MA delivered profits in more months over the last year, than losses. MA delivered profits in more months than SP500 index. MA was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -11.66% compared to -7.28% returned by SP500 index in Oct 2018. MA and SP500 index, both had periods of 6 consecutive profitable months.

All intelligent investing is value investing - acquiring more than you are paying for. You must value the business in order to value the stock .
-- Charles Thomas Munger

MA 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 MA's volatility from 3 Oct, 2018 to 30 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 MA 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.

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

On a general note (since you are interested in MA), three instruments that have performed similar to MA are CONE, ARW and UPS. They must all be evaluated as alternative investment options and for diversification.

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