80.1 -3.7 (-4.62%) Sell

Don't even consider investing in PII now, it is a high risk investment

13 min read

POLARIS INDUSTRIES INC is a falling knife that can bleed you if you catch it on Thursday. It returned -4.62% to close at 80.1. On a day when the overall market breadth was 35%, it closed higher than 66% of the market. In comparison, the benchmark SP500 index closed today at -0.0002%.

[Themes containing PII]

PII showed a strong down trend over the last 3 months. During this period PII returned -26.46% and saw a maximum drawdown of -26.6%. There were 2 short signals during this period that returned a cumulative of +24.54% to investors.


PII has been underperforming the SP500 index in recent time, after having outperformed till 8 Dec, 2017. PII is currently at it's worst performance to the SP500 index and therefore does not make a good investment candidate. Over the last 2 years 11 months and 9 days, PII underperformed the SP500 index on 48% days. Which indicates that on days PII underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months PII was mostly loss making and delivered on average -0.46% per day. It's best return during this period (of +7.05%) was on Thursday, 1 Nov, 2018. While it's worst loss in the same period (of -9.83%) was on Tuesday, 4 Dec, 2018. There was initially a bearish trend during this period which started on 5 Oct, 2018 and went on till 11 Oct, 2018. The trend delivered -7.1% losses to investors. This was followed by a bullish trend that started on 13 Nov, 2018 and ended on 16 Nov, 2018. This bullish trend delivered +6.09% to investors.

On monthly basis, PII delivered profits and losses in equal number of months. PII delivered profits less regularly than SP500 index. PII was also a more risky investment than SP500 index as it's worst month in the last year, Dec 2018, returned -17.42% compared to -7.28% returned by SP500 index in Oct 2018. PII had a shorter streak of profitable months than SP500 index. It only went up in 2 straight months during the last year.

"Cash combined with courage in a time of crisis is priceless.

PII 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 PII's volatility from 19 Sep, 2018 to 23 Oct, 2018. While there was a significant surge in the SP500 index's volatility from 25 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that PII has significant positive skewness in it's return distribution. This indicates that investors can expect PII to recover from drawdowns quickly. Which makes PII a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

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

Based on your interest in PII you may find it interesting to know that ~SMALLCAP has shown remarkable performance and deserves to be on every investors' watchlist.

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