33.88 +0.35 (+1.04%) Sell

Profit booking on the minds of MMI investors as it shows marginal outperformance

13 min read

MARCUS & MILLICHAP, INC. delivered good returns today. It grew by +1.04% to close at 33.88. During the last week it lost -3.43% and saw a maximum drawdown of -4.58% before bouncing back.

[Themes containing MMI]

Buy-and-Hold investors in MMI experienced a maximum drawdown of -11.71% over the last three months. It lost -2.02% during this down trending period. There were no long signals during this period, where the short signal generated profits of +3.04% for investors.


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

During the last three months MMI was mostly loss making and delivered on average -0.02% per day. It's best return during this period (of +7.59%) was on Wednesday, 31 Oct, 2018. While it's worst loss in the same period (of -4.28%) was on Tuesday, 4 Dec, 2018. There was initially a bearish trend during this period which started on 1 Oct, 2018 and went on till 5 Oct, 2018. The trend delivered -6.77% losses to investors. This was followed by a bullish trend that started on 29 Oct, 2018 and ended on 1 Nov, 2018. This bullish trend delivered +13.11% to investors.

MMI had 7 profitable and 5 loss making months over the last year. During the last year, MMI underperformed SP500 index on monthly return basis. MMI significantly outperformed SP500 index in Mar 2018, when it returned +15.21% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. MMI 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 MMI and SP500 index significantly outperform during months when quarterly/annual results are announced.

Wealth after all is a relative thing since he that has little and wants less is richer than he that has much and wants more.
-- Charles Caleb Colton

MMI 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 MMI's volatility from 28 Sep, 2018 to 8 Nov, 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 MMI has significant positive skewness in it's return distribution. This indicates that investors can expect MMI to recover from drawdowns quickly. Which makes MMI 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 MMI. Therefore, SP500 must receive a lower allocation than MMI in your portfolio. MMI usually has shorter drawdown period than the SP500 index.

On a general note (since you are interested in MMI), two mid cap instruments that deserve special mention are LULU and SQ. They have significantly outperformed the overall market.

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