MMM investors elated by performance
18 Dec, 201813 min read
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3M CO was among the best performers on Tuesday. It returned +0.9% to close at 194.56. It is currently trading -24% below it's 52 week high of 258.63.
MMM is currently in a down trend. The current bearish signal has generated a profit of +3.75% for investors in the last three months.
MMM has been outperforming the SP500 index in recent time. Over the last 2 years 11 months and 14 days, MMM outperformed the SP500 index on 53% days.
During the last three months MMM delivered profits on 58% days. However, it still managed to end this period in a loss. It's best return during this period (of +3.46%) was on Thursday, 15 Nov, 2018. While it's worst loss in the same period (of -4.38%) was on Tuesday, 23 Oct, 2018. There was initially a bullish trend during this period which started on 29 Oct, 2018 and went on till 8 Nov, 2018. The bullish trend returned +9.93% to investors. This was followed by a bearish trend that started on 19 Nov, 2018 and ended on 23 Nov, 2018. This bearish trend lost -5.97% of investor capital.
MMM had 4 profitable and 8 loss making months over the last year. During the last year, MMM underperformed SP500 index on monthly return basis. MMM was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -10.34% compared to -7.75% returned by SP500 index in Dec 2018. MMM had a longer winning streak of losing months than SP500 index. It went down in 3 straight months (from Feb 2018 to Apr 2018) during which period it delivered -21.34%.
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MMM 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 MMM's volatility from 19 Sep, 2018 to 24 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 MMM has significant positive skewness in it's return distribution. This indicates that investors can expect MMM to recover from drawdowns quickly. Which makes MMM a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.
Investors trading in MMM derivatives at this moment can consider 'Covered Call' options strategy to receive better risk-adjusted returns.
SP500 index has more chance of extreme outcomes than MMM. Therefore, SP500 must receive a lower allocation than MMM in your portfolio. MMM usually has shorter drawdown period than the SP500 index.
On a general note (since you are interested in MMM), PTC is a small cap that deserves to be closely tracked for investment opportunities.
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