22.33 -0.18 (-0.8%) Sell

Stop-loss on the minds of MHO investors as it underperforms

13 min read

M I HOMES INC performed worse than the broader market on Monday. It returned -0.8% to close at 22.33. It is currently trading -40% below it's 52 week high of 37.26.

[Themes containing MHO]

Buy-and-Hold investors in MHO experienced a maximum drawdown of -14.61% over the last three months. It returned -11.14% during this strong down trending period. There were no long signals during this period, where the short signal generated good profits of +11.14% for investors.


MHO has been outperforming the SP500 index in recent time. Over the last 2 years 11 months and 10 days, MHO underperformed the SP500 index on 48% days. Which indicates that on days MHO underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months MHO was mostly loss making and delivered on average -0.17% per day. It's best return during this period (of +4.91%) was on Tuesday, 30 Oct, 2018. While it's worst loss in the same period (of -4.91%) was on Thursday, 15 Nov, 2018. There was initially a bearish trend during this period which started on 24 Sep, 2018 and went on till 1 Oct, 2018. The trend delivered -6.37% losses to investors. This was followed by a bullish trend that started on 30 Oct, 2018 and ended on 5 Nov, 2018. This bullish trend delivered +8.23% to investors.

On monthly basis, MHO delivered losses in more months over the last year, than profits. MHO delivered profits less regularly than SP500 index. MHO was also a more risky investment than SP500 index as it's worst month in the last year, Feb 2018, returned -10.17% compared to -7.28% returned by SP500 index in Oct 2018. MHO had a longer winning streak of losing months than SP500 index. It went down in 4 straight months (from Apr 2018 to Jul 2018) during which period it delivered -15.16%. It is interesting to note that both MHO and SP500 index significantly outperform during months when quarterly/annual results are announced.

Financial security and independence are like a three-legged stool resting on savings, insurance and investments.
-- Brian Tracy

MHO 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 MHO's volatility from 25 Sep, 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 MHO has significant positive skewness in it's return distribution. This indicates that investors can expect MHO to recover from drawdowns quickly. Which makes MHO a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

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

Based on your interest in MHO you may find it interesting to know that ICPT is highly volatile and investors investing in it must take extreme caution. Consider either reducing your exposure to ICPT or sufficiently diversifying your portfolio.

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