Don't profit book on POOL now, it delivered great returns
13 Dec, 201813 min read
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POOL CORP outperformed on Thursday. It surged by +0.55% to close at 150.93. It is currently trading +19% above it's 52 week low of 125.81 and is down only -13% from it's 52 week high.
POOL showed a strong bearish trend over the last 3 months. During this period POOL fell by -12.66% and saw a maximum drawdown of -20.5%. There was a short signal during this period which returned +1.6%.
POOL has been outperforming the SP500 index in recent time. It showed significant outperformance (compared to the SP500 index) from 4 Jan, 2016 to 18 Sep, 2018. Over the last 2 years 11 months and 9 days, POOL outperformed the SP500 index on 51% days.
POOL returned losses on 54% days in the last three months. During this time, it delivered on average -0.21% per day. It delivered it's best daily return of +4.02%, during this period, on Wednesday, 28 Nov, 2018. The longest stort-term trend during this period was 8 losing days, which started on 2 Oct, 2018 and ended on 11 Oct, 2018. This bearish trend lost -12.74% of investor capital.
During the last year POOL had 9 profitable months and 3 loss making months. POOL returned profits in more months than SP500 index. POOL was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -12.72% compared to -7.28% returned by SP500 index in Oct 2018. POOL had a shorter streak of profitable months than SP500 index. It only went up in 5 straight months during the last year.
The stock market clearly values companies that can deliver disruptive innovation.
-- Steve Blank
POOL 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 POOL's volatility from 1 Oct, 2018 to 18 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 POOL 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 POOL. Therefore, SP500 must receive a lower allocation than POOL in your portfolio. SP500 index usually has shorter drawdown period than POOL.
On a general note (since you are interested in POOL), if you are an investor in VIPS, you need to be extra careful (consider limiting your exposure or diversifying) as it is extremely unpredictable and therefore risky.
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