Don't go shopping for PLD now, it is underperforming the market
07 Dec, 201813 min read
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PROLOGIS, INC. significantly underperformed on Friday. It delivered -2.39% to close at 66.84. It is currently trading +14% above it's 52 week low of 58.33 and is down only -2% from it's 52 week high.
PLD showed a flat trend over the last 3 months. During this period PLD delivered +0.45% and saw a maximum drawdown of -7.74%. It has been unusually choppy during this period. Long term investors are better off avoiding investing in PLD till volatility reduces and a clear trend emerges.
PLD has been outperforming the SP500 index in recent time. It showed significant outperformance (compared to the SP500 index) from 22 Feb, 2016 to 14 Nov, 2017. Over the last 2 years 11 months and 3 days, PLD outperformed the SP500 index on 53% days.
During the last three months PLD was mostly profitable and delivered on average +0.02% per day. It's best return during this period (of +2.42%) was on Thursday, 6 Dec, 2018. While it's worst loss in the same period (of -4.15%) was on Thursday, 11 Oct, 2018. The longest stort-term trend during this period was 6 profitable days, which started on 5 Nov, 2018 and went on till 12 Nov, 2018. This bullish trend returned +5.2% to investors.
The last 12 months saw PLD's investors making profits in 8 months and incurring losses in 4 months. During the last year, PLD and SP500 index had the same number of profitable months. PLD was also a less risky investment than SP500 index as it's worst month in the last year, Feb 2018, returned -6.8% compared to -7.28% returned by SP500 index in Oct 2018. PLD had a shorter streak of profitable months than SP500 index. It only went up in 4 straight months during the last year. It is interesting to note that both PLD and SP500 index significantly outperform during months when quarterly/annual results are announced.
"The monarchy is foremost a business, and it's important to them that the British public continue to finance the excessive luxurious lifestyles of the now quite enormous, wasteful and useless 'royal' family. I find it very sad.
PLD 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 PLD's volatility from 10 Sep, 2018 to 6 Dec, 2018. While there was a significant surge in the SP500 index's volatility from 10 Sep, 2018 to 29 Oct, 2018.
Advanced/professional short-term investors should note that PLD has significant positive skewness in it's return distribution. This indicates that investors can expect PLD to recover from drawdowns quickly. Which makes PLD a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.
PLD has more chance of extreme outcomes than the SP500 index. Therefore, PLD must receive a lower allocation than SP500 in your portfolio. SP500 index usually has shorter drawdown period than PLD.
Based on your interest in PLD you may find it interesting to know that OPNT and NVCN are highly volatile and therefore risky. Investors should consider limiting their exposure to these instruments (because of their volatile nature).
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