PACIFIC ETHANOL, INC.

1.22 -0.11 (-8.96%) Buy

PEIX investors herd to book profits while the going is good

13 min read

PEIX has destroyed investor wealth today. On a longer term basis, investors in PACIFIC ETHANOL, INC. made +0.02% per day. Tuesday's performance of -8.96% was a significant underperformance compared to it's daily average.

[Themes containing PEIX]

Buy-and-Hold investors in PEIX experienced a maximum drawdown of -58.08% over the last three months. It lost -26.06% during this strong down trending period. There were both Long and Short signals during this period, while the long signals were significantly more profitable than the short signals.

Trend

PEIX has been outperforming the SP500 index in recent time. Over the last 2 years 11 months and 14 days, PEIX underperformed the SP500 index on 51% days.

During the last three months PEIX was mostly loss making and delivered on average -0.16% per day. It's best return during this period (of +43.09%) was on Monday, 8 Oct, 2018. While it's worst loss in the same period (of -19.24%) was on Wednesday, 10 Oct, 2018. There was initially a bearish trend during this period which started on 18 Oct, 2018 and went on till 29 Oct, 2018. The trend delivered -40.86% losses to investors. This was followed by a bullish trend that started on 26 Nov, 2018 and ended on 28 Nov, 2018. This bullish trend delivered +8.02% to investors.

PEIX had 3 profitable and 9 loss making months over the last year. During the last year, PEIX underperformed SP500 index on monthly return basis. PEIX was also a more risky investment than SP500 index as it's worst month in the last year, Aug 2018, returned -36.75% compared to -7.75% returned by SP500 index in Dec 2018. PEIX had a longer winning streak of losing months than SP500 index. It went down in 3 straight months (from Jan 2018 to Mar 2018) during which period it delivered -37.91%. It is interesting to note that both PEIX and SP500 index significantly outperform during months when quarterly/annual results are announced.

"I'm involved in the stock market, which is fun and, sometimes, very painful.

PEIX 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 PEIX's volatility from 19 Sep, 2018 to 20 Sep, 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 PEIX 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 PEIX. Therefore, SP500 must receive a lower allocation than PEIX in your portfolio. SP500 index usually has shorter drawdown period than PEIX.

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

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