MMYT is a falling knife, continues to bleed every investor trying to catch it
07 Dec, 201813 min read
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MAKEMYTRIP LTD (Foreign) ranked among the worst performers on Friday. It fell by -3.26% to close at 23.72. It is currently trading -42% below it's 52 week high of 41.05.
MMYT is currently in a bearish trend. The current bearish signal has generated a profit of +18.35% for investors in the last three months.
MMYT has been outperforming the SP500 index in recent time. It showed significant outperformance (compared to the SP500 index) from 1 Jun, 2016 to 1 May, 2017. Over the last 2 years 11 months and 3 days, MMYT outperformed the SP500 index on 47% days. Which indicates that on days MMYT outperforms the SP500 index, it's performance is marginally better than on the days it underperforms the SP500 index.
MMYT returned losses on 62% days in the last three months. During this time, it delivered on average -0.27% per day. It delivered it's best daily return of +10.1%, during this period, on Friday, 12 Oct, 2018. The longest stort-term trend during this period was 11 losing days, which started on 27 Sep, 2018 and ended on 11 Oct, 2018. This bearish trend lost -25.41% of investor capital.
During the last year MMYT had 5 profitable months and 7 loss making months. MMYT returned profits in fewer months than SP500 index. MMYT significantly outperformed SP500 index in Apr 2018, when it returned +13.89% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. MMYT had a longer winning streak of losing months than SP500 index. It went down in 4 straight months (from Jul 2018 to Oct 2018) during which period it delivered -31.99%.
There's more honor in investment management than in investment banking.
-- Charlie Munger
MMYT is currently seeing overall fall in volatility. In comparison, the SP500 index is seeing increase in volatility. During the last three months, there was a significant surge in MMYT's volatility from 14 Sep, 2018 to 26 Sep, 2018. While there was a significant surge in the SP500 index's volatility from 10 Sep, 2018 to 29 Oct, 2018.
Advanced/professional short-term investors should note that MMYT 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 MMYT. Therefore, SP500 must receive a lower allocation than MMYT in your portfolio. SP500 index usually has shorter drawdown period than MMYT.
Based on your interest in MMYT you may find it interesting to know that AAXN and BURL are both small caps that have shown remarkable performance and deserve to be on every investors' watchlist.
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