91.41 -1.15 (-1.25%) Sell

POST is a falling knife, continues to bleed every investor trying to catch it

13 min read

POST HOLDINGS, INC. is a falling knife that can bleed you if you catch it on Friday. It lost -1.25% to close at 91.41. It is currently trading +27% above it's 52 week low of 71.63 and is down only -9% from it's 52 week high.

[Themes containing POST]

Buy-and-Hold investors in POST experienced a maximum drawdown of -15.0% over the last three months. It lost -6.52% during this down trending period. There were both Long and Short signals during this period, where the short signals were significantly more profitable than the long signals. The net profit from Short signals was +3.55%.


POST has been outperforming the SP500 index in recent time. Over the last 2 years 11 months and 3 days, POST outperformed the SP500 index on 52% days.

During the last three months POST was mostly loss making and delivered on average -0.09% per day. It's best return during this period (of +5.62%) was on Friday, 16 Nov, 2018. While it's worst loss in the same period (of -5.07%) was on Friday, 26 Oct, 2018. There was initially a bullish trend during this period which started on 10 Sep, 2018 and went on till 14 Sep, 2018. The bullish trend returned +2.9% to investors. This was followed by a bearish trend that started on 22 Oct, 2018 and ended on 26 Oct, 2018. This bearish trend lost -11.11% of investor capital.

POST had 7 profitable and 5 loss making months over the last year. During the last year, POST underperformed SP500 index on monthly return basis. POST significantly outperformed SP500 index in Aug 2018, when it returned +12.36% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. POST had a shorter streak of profitable months than SP500 index. It only went up in 4 straight months during the last year.

A real entrepreneur is somebody who has no safety net underneath them.
-- Henry Kravis

POST is becoming less volatile overall. In comparison, the SP500 index is seeing a rise in volatility. During the last three months, there was a significant surge in POST's volatility from 17 Sep, 2018 to 19 Nov, 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 POST 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 POST. Therefore, SP500 must receive a lower allocation than POST in your portfolio. SP500 index usually has shorter drawdown period than POST.

On a general note (since you are interested in POST), three large cap instruments that deserve special mention are V, CSCO and MSFT. They have all outperformed the market and must be closely watched for investment opportunities.

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