MOBILE TELESYSTEMS PJSC (FOREIGN)

7.26 +0.13 (+1.82%) Sell

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

13 min read

MBT ranked among the best performers today. On a longer term basis, investors in MOBILE TELESYSTEMS PJSC (Foreign) made -0.03% per day. Thursday's performance of +1.82% was a outperformance compared to it's daily average.

[Themes containing MBT]

MBT showed a strong bearish trend over the last 3 months. During this period MBT delivered -11.57% and saw a maximum drawdown of -24.0%. It has been unusually choppy during this period. Long term investors are better off avoiding investing in MBT till volatility reduces and a clear trend emerges.

Trend

MBT has been underperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 24 Mar, 2017 to 10 Sep, 2018. Over the last 2 years 11 months and 9 days, MBT underperformed the SP500 index on 48% days. Which indicates that on days MBT underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months MBT was mostly loss making and delivered on average -0.16% per day. It's best return during this period (of +7.22%) was on Wednesday, 12 Dec, 2018. While it's worst loss in the same period (of -7.91%) was on Tuesday, 20 Nov, 2018. The longest stort-term trend during this period was 6 profitable days, which started on 29 Oct, 2018 and went on till 5 Nov, 2018. This bullish trend returned +9.69% to investors.

The last 12 months saw MBT's investors making profits in 2 months and incurring losses in 10 months. MBT was less consistent in delivering monthly returs than SP500 index. MBT significantly outperformed SP500 index in Jan 2018, when it returned +17.07% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. MBT had a longer winning streak of losing months than SP500 index. It went down in 7 straight months (from Feb 2018 to Aug 2018) during which period it delivered -45.27%. It is interesting to note that both MBT and SP500 index significantly outperform during months when quarterly/annual results are announced.

"The real measure of your wealth is how much you'd be worth if you lost all your money

MBT is currently seeing overall increase in volatility. In comparison, the SP500 index is seeing increase in volatility. During the last three months, there was a significant fall in MBT's volatility from 18 Sep, 2018 to 1 Oct, 2018. While there was a significant surge in the SP500 index's volatility from 14 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that MBT 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.

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

On a general note (since you are interested in MBT), two small cap instruments that deserve special mention are BURL and ZBRA. They have significantly outperformed the overall market.

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