MOELIS & CO

38.0 -0.39 (-1.02%) Sell

Prayers for MC investors as it was among the worst performers

13 min read

MOELIS & CO was among the worst performers on Tuesday. It delivered -1.02% to close at 38.0 which is it's 52 week low, down -43% from it's 52 week high.

[Themes containing MC]

MC is currently in a bearish trend. The current bearish signal has generated a profit of +31.22% for investors in the last three months.

Trend

MC has been underperforming the SP500 index in recent time. It showed significant outperformance (compared to the SP500 index) from 5 Jul, 2016 to 20 Jun, 2018. Over the last 2 years 11 months and 7 days, MC outperformed the SP500 index on 54% days.

MC returned losses on 57% days in the last three months. During this time, it delivered on average -0.56% per day. It delivered it's worst daily return of -16.71%, during this period, on Tuesday, 23 Oct, 2018. The longest stort-term trend during this period was 5 losing days, which started on 18 Oct, 2018 and ended on 24 Oct, 2018. This bearish trend lost -24.43% of investor capital.

The last 12 months saw MC's investors making profits in 6 months and incurring losses in 6 months. MC was less consistent in delivering monthly returs than SP500 index. MC was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -27.44% compared to -7.28% returned by SP500 index in Oct 2018. MC had a shorter streak of profitable months than SP500 index. It only went up in 3 straight months during the last year. It is interesting to note that both MC and SP500 index significantly outperform during months when quarterly/annual results are announced.

Whether we're talking about socks or stocks, I like buying quality merchandise when it is marked down.
-- Warren Edward Buffett

MC 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 surge in MC's volatility from 13 Sep, 2018 to 24 Oct, 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 MC has significant positive skewness in it's return distribution. This indicates that investors can expect MC to recover from drawdowns quickly. Which makes MC 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 MC. Therefore, SP500 must receive a lower allocation than MC in your portfolio. MC usually has shorter drawdown period than the SP500 index.

On a general note (since you are interested in MC), three instruments that are extremely volatile are EPIX, IX and ICPT. They must all be evaluated prudently and investors are better off avoiding them at the moment.

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