61.67 -3.35 (-5.43%) Sell

Stop-loss on the minds of PSMT investors as it significantly underperforms

13 min read

PRICESMART INC significantly underperformed today. It lost -5.43% to close at 61.67. During the last week it lost -7.8% and saw a maximum drawdown of -8.57% before bouncing back.

[Themes containing PSMT]

PSMT is currently in a down trend. Over the last three months 2 bearish signals have generated a profit of +15.85% for investors.


PSMT has been underperforming the SP500 index in recent time, after having outperformed till 6 Jul, 2016. Over the last 2 years 11 months and 3 days, PSMT underperformed the SP500 index on 46% days. Which indicates that on days PSMT underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months PSMT was mostly loss making and delivered on average -0.53% per day. It's best return during this period (of +2.88%) was on Friday, 19 Oct, 2018. While it's worst loss in the same period (of -15.22%) was on Friday, 26 Oct, 2018. There was initially a bearish trend during this period which started on 12 Sep, 2018 and went on till 19 Sep, 2018. The trend delivered -5.16% losses to investors. This was followed by a bullish trend that started on 19 Oct, 2018 and ended on 25 Oct, 2018. This bullish trend delivered +5.79% to investors.

PSMT had 4 profitable and 8 loss making months over the last year. During the last year, PSMT underperformed SP500 index on monthly return basis. PSMT was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -11.76% compared to -7.28% returned by SP500 index in Oct 2018. PSMT had a longer winning streak of losing months than SP500 index. It went down in 4 straight months (from Sep 2018 to Dec 2018) during which period it delivered -31.0%.

I hate weekends because there is no stock market.
-- Rene Rivkin

PSMT 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 PSMT's volatility from 13 Sep, 2018 to 29 Oct, 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 PSMT has significant positive skewness in it's return distribution. This indicates that investors can expect PSMT to recover from drawdowns quickly. Which makes PSMT 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 PSMT. Therefore, SP500 must receive a lower allocation than PSMT in your portfolio. PSMT usually has shorter drawdown period than the SP500 index.

On a general note (since you are interested in PSMT), V is a large cap that deserves to be closely tracked for investment opportunities.

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