100.14 -0.75 (-0.75%) Sell

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

13 min read

PPG INDUSTRIES INC ranked among the worst performers on Friday. It lost -0.75% to close at 100.14. It is currently trading -17% below it's 52 week high of 121.47.

[Themes containing PPG]

Buy-and-Hold investors in PPG experienced a maximum drawdown of -18.01% over the last three months. It lost -11.37% during this strong 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.


PPG has been underperforming the SP500 index in recent time, after having outperformed till 19 Apr, 2016. Over the last 2 years 11 months and 10 days, PPG underperformed the SP500 index on 47% days. Which indicates that on days PPG underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months PPG delivered profits on 55% days. However, it still managed to end this period in a loss. It's best return during this period (of +6.06%) was on Thursday, 25 Oct, 2018. While it's worst loss in the same period (of -10.06%) was on Tuesday, 9 Oct, 2018. There was initially a bullish trend during this period which started on 17 Sep, 2018 and went on till 21 Sep, 2018. The bullish trend returned +2.63% to investors. This was followed by a bearish trend that started on 24 Sep, 2018 and ended on 27 Sep, 2018. This bearish trend lost -6.16% of investor capital.

PPG had 4 profitable and 8 loss making months over the last year. During the last year, PPG underperformed SP500 index on monthly return basis. PPG was also a more risky investment than SP500 index as it's worst month in the last year, Dec 2018, returned -8.41% compared to -7.28% returned by SP500 index in Oct 2018. PPG had a longer winning streak of losing months than SP500 index. It went down in 4 straight months (from Feb 2018 to May 2018) during which period it delivered -12.93%. It is interesting to note that both PPG and SP500 index significantly outperform during months when quarterly/annual results are announced.

If you took our top fifteen decisions out, we'd have a pretty average record. It wasn't hyperactivity, but a hell of a lot of patience. You stuck to your principles and when opportunities came along, you pounced on them with vigor.
-- Charlie Munger

PPG 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 PPG's volatility from 18 Sep, 2018 to 29 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 PPG has significant positive skewness in it's return distribution. This indicates that investors can expect PPG to recover from drawdowns quickly. Which makes PPG a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

Investors trading in PPG derivatives at this moment can consider 'Bull Call Spread' options strategy to receive better risk-adjusted returns.

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

On a general note (since you are interested in PPG), three instruments that deserve special mention are NSPR, APRN and AYTU. They have all outperformed the market and must be closely watched for investment opportunities.

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