6.3 -0.23 (-3.67%) Sell

PBI is a falling knife, continues to bleed every investor trying to catch it

13 min read

PITNEY BOWES INC was among the worst performers today. It delivered -3.67% to close at 6.3. It's recent 5 day performance has been -4.53%, -3.52%, +1.14%, +1.74% and -2.68%.

[Themes containing PBI]

PBI showed a strong bearish trend over the last 3 months. During this period PBI delivered -14.63% and saw a maximum drawdown of -25.71%. It has been unusually choppy during this period. Long term investors are better off avoiding investing in PBI till volatility reduces and a clear trend emerges.


PBI has been underperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 31 Mar, 2016 to 2 Oct, 2018. Over the last 2 years 11 months and 10 days, PBI underperformed the SP500 index on 50% days. Which indicates that on days PBI underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

PBI returned losses on 60% days in the last three months. During this time, it delivered on average -0.2% per day. It delivered it's best daily return of +19.34%, during this period, on Thursday, 1 Nov, 2018. The longest stort-term trend during this period was 5 profitable days, which started on 21 Nov, 2018 and went on till 28 Nov, 2018. This bullish trend returned +7.79% to investors.

The last 12 months saw PBI's investors making profits in 3 months and incurring losses in 9 months. PBI was less consistent in delivering monthly returs than SP500 index. PBI significantly outperformed SP500 index in Nov 2018, when it returned +27.49% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. PBI had a longer winning streak of losing months than SP500 index. It went down in 5 straight months (from Feb 2018 to Jun 2018) during which period it delivered -45.86%. It is interesting to note that both PBI and SP500 index significantly outperform during months when quarterly/annual results are announced.

Happiness is not in the mere possession of money; it lies in the joy of achievement, in the thrill of creative effort.
-- Franklin D. Roosevelt

PBI is currently seeing overall increase in volatility. In comparison, the SP500 index is seeing increase in volatility. During the last three months, there was a significant fall in PBI's volatility from 1 Nov, 2018 to 3 Dec, 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 PBI 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 PBI. Therefore, SP500 must receive a lower allocation than PBI in your portfolio. SP500 index usually has shorter drawdown period than PBI.

On a general note (since you are interested in PBI), three instruments that have performed similar to PBI are CFX, NFX and EQT. They must all be evaluated as alternative investment options and for diversification.

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