33.11 -0.59 (-1.78%) Sell

Don't buy PEB now, it is a really dangerous investment now

13 min read

PEBBLEBROOK HOTEL TRUST is a falling knife that can bleed you if you catch it today. It delivered -1.78% to close at 33.11. It's recent 5 day performance has been -2.37%, -3.36%, +1.97%, -1.74% and +2.12%.

[Themes containing PEB]

PEB showed a bearish trend over the last 3 months. During this period PEB delivered -9.54% and saw a maximum drawdown of -15.09%. There were 2 short signals during this period that returned a cumulative of +3.61% to investors.


PEB has been underperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 30 May, 2018 to 18 Oct, 2018. Over the last 2 years 11 months and 7 days, PEB underperformed the SP500 index on 48% days. Which indicates that on days PEB underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

PEB was profitable on 50% days in the last three months. During this time, it delivered on average -0.15% per day. It delivered it's worst daily return of -3.36%, during this period, on Friday, 7 Dec, 2018. The longest stort-term trend during this period was 8 profitable days, which started on 9 Nov, 2018 and went on till 20 Nov, 2018. This bullish trend returned +4.86% to investors.

The last 12 months saw PEB's investors making profits in 6 months and incurring losses in 6 months. PEB was less consistent in delivering monthly returs than SP500 index. PEB significantly outperformed SP500 index in May 2018, when it returned +16.66% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. PEB 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 PEB and SP500 index significantly outperform during months when quarterly/annual results are announced.

In order to succeed, your desire for success should be greater than your fear of failure.
-- Bill Cosby

PEB 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 surge in PEB's volatility from 18 Sep, 2018 to 11 Dec, 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 PEB has significant positive skewness in it's return distribution. This indicates that investors can expect PEB to recover from drawdowns quickly. Which makes PEB a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

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

On a general note (since you are interested in PEB), ABMD is a mid cap that deserves to be closely tracked for investment opportunities.

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