11.74 +0.04 (+0.34%) Sell

Don't lose faith in PSO now, it delivered good returns

13 min read

PEARSON PLC (Foreign) was among the best performers today. It returned +0.34% to close at 11.74. It's recent 5 day performance has been +1.56%, 0.0%, -0.26%, -2.53% and -1.9%.

[Themes containing PSO]

PSO showed a up trend over the last 3 months. During this period PSO returned +7.81% and saw a maximum drawdown of -12.91%. There were 2 long signals during this period that returned a cumulative of +1.14% to investors.


PSO has been outperforming the SP500 index in recent time. Over the last 2 years 11 months and 9 days, PSO underperformed the SP500 index on 48% days. Which indicates that on days PSO underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months PSO was mostly profitable and delivered on average +0.13% per day. It's best return during this period (of +3.18%) was on Tuesday, 16 Oct, 2018. While it's worst loss in the same period (of -4.08%) was on Tuesday, 2 Oct, 2018. There was initially a bullish trend during this period which started on 14 Sep, 2018 and went on till 24 Sep, 2018. The bullish trend returned +6.2% to investors. This was followed by a bearish trend that started on 28 Sep, 2018 and ended on 8 Oct, 2018. This bearish trend lost -9.68% of investor capital.

On monthly basis, PSO delivered profits and losses in equal number of months. PSO delivered profits less regularly than SP500 index. PSO significantly outperformed SP500 index in Apr 2018, when it returned +9.81% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. PSO 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 PSO and SP500 index significantly outperform during months when quarterly/annual results are announced.

What we really want to do is what we are really meant to do. When we do what we are meant to do, money comes to us, doors open for us, we feel useful, and the work we do feels like play to us.
-- Julia Cameron

PSO 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 PSO's volatility from 18 Sep, 2018 to 29 Oct, 2018. While there was a significant surge in the SP500 index's volatility from 14 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that PSO has significant positive skewness in it's return distribution. This indicates that investors can expect PSO to recover from drawdowns quickly. Which makes PSO 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 PSO. Therefore, SP500 must receive a lower allocation than PSO in your portfolio. PSO usually has shorter drawdown period than the SP500 index.

Based on your interest in PSO you may find it interesting to know that ABMD, LULU and TWTR are mid caps that have all shown remarkable performance and qualify to be on every investor's watchlist.

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