98.29 +1.2 (+1.23%) Sell

MAA does a dead cat bounce, it's still too early to buy into it

13 min read

MID AMERICA APARTMENT COMMUNITIES INC. delivered stellar performance today. It gained +1.23% to close at 98.29. It's recent 5 day performance has been -4.25%, -0.06%, +1.57%, -1.99% and +0.05%.

[Themes containing MAA]

MAA showed a down trend over the last 3 months. During this period MAA returned -3.44% and saw a maximum drawdown of -8.19%. There were 2 short signals during this period that returned a cumulative of +3.48% to investors.


MAA has been outperforming the SP500 index in recent time. Over the last 2 years 11 months and 14 days, MAA underperformed the SP500 index on 49% days. Which indicates that on days MAA underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

MAA was profitable on 58% days in the last three months. During this time, it delivered on average -0.05% per day. It delivered it's worst daily return of -4.25%, during this period, on Monday, 17 Dec, 2018. There was initially a bearish trend during this period which started on 10 Oct, 2018 and went on till 12 Oct, 2018. The trend delivered -5.45% losses to investors. This was followed by a bullish trend that started on 5 Nov, 2018 and ended on 13 Nov, 2018. This bullish trend delivered +5.16% to investors.

On monthly basis, MAA delivered profits in more months over the last year, than losses. MAA delivered profits less regularly than SP500 index. MAA was also a more risky investment than SP500 index as it's worst month in the last year, Feb 2018, returned -10.01% compared to -7.75% returned by SP500 index in Dec 2018. MAA and SP500 index, both had periods of 6 consecutive profitable months.

Making money from enforcing patents is no more wrong than investing in preferred stock.
-- Nathan Myhrvold

MAA 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 MAA's volatility from 2 Oct, 2018 to 26 Oct, 2018. While there was a significant surge in the SP500 index's volatility from 19 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that MAA has significant positive skewness in it's return distribution. This indicates that investors can expect MAA to recover from drawdowns quickly. Which makes MAA a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

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

On a general note (since you are interested in MAA), two instruments that deserve special mention are NSPR and TYHT. They have significantly outperformed the overall market.

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