26.49 +0.47 (+1.77%) Sell

Don't lose faith in MSB now, it delivered good returns

13 min read

MSB outperformed the broader market today. On a longer term basis, investors in MESABI TRUST made +0.05% per day. Wednesday's performance of +1.77% was a outperformance compared to it's daily average.

[Themes containing MSB]

MSB showed a bearish trend over the last 3 months. During this period MSB delivered -3.5% and saw a maximum drawdown of -22.74%. It has been unusually choppy during this period. Long term investors are better off avoiding investing in MSB till volatility reduces and a clear trend emerges.


MSB has been underperforming the SP500 index in recent time. It showed significant outperformance (compared to the SP500 index) from 19 Jan, 2016 to 3 Oct, 2018. Over the last 2 years 11 months and 8 days, MSB outperformed the SP500 index on 50% days. Which indicates that on days MSB outperforms the SP500 index, it's performance is marginally better than on the days it underperforms the SP500 index.

During the last three months MSB was mostly loss making and delivered on average -0.02% per day. It's best return during this period (of +10.22%) was on Tuesday, 2 Oct, 2018. While it's worst loss in the same period (of -5.84%) was on Monday, 29 Oct, 2018. The longest stort-term trend during this period was 7 losing days, which started on 20 Sep, 2018 and ended on 28 Sep, 2018. This bearish trend lost -5.29% of investor capital.

The last 12 months saw MSB's investors making profits in 4 months and incurring losses in 8 months. MSB was less consistent in delivering monthly returs than SP500 index. MSB significantly outperformed SP500 index in Jul 2018, when it returned +15.78% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. MSB had a longer winning streak of losing months than SP500 index. It went down in 5 straight months (from Aug 2018 to Dec 2018) during which period it delivered -10.29%.

He who loses money, loses much; He who loses a friend, loses much more; He who loses faith, loses all.
-- Eleanor Roosevelt

MSB 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 MSB's volatility from 18 Sep, 2018 to 4 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 MSB has significant negative skewness in it's return distribution. This indicates that MSB is very risky for short-term investment and can significantly underperform for long durations.

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

Based on your interest in MSB you may find it interesting to know that NIHD, I and TNDM have all shown remarkable performance this year and deserve to be on every investor's watchlist.

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