47.31 +0.25 (+0.53%) Sell

PSXP does a dead cat bounce, it's still too early to buy into it

13 min read

PHILLIPS 66 PARTNERS LP outperformed the broader market on Friday. It increased by +0.53% to close at 47.31. It is currently trading -15% below it's 52 week high of 56.23.

[Themes containing PSXP]

Buy-and-Hold investors in PSXP experienced a maximum drawdown of -15.07% over the last three months. It delivered -8.67% during this bearish 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 +5.67%.


PSXP has been outperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 10 Feb, 2016 to 26 Sep, 2018. Over the last 2 years 11 months and 10 days, PSXP underperformed the SP500 index on 49% days. Which indicates that on days PSXP underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months PSXP was mostly loss making and delivered on average -0.13% per day. It's best return during this period (of +3.95%) was on Thursday, 13 Dec, 2018. While it's worst loss in the same period (of -4.11%) was on Tuesday, 20 Nov, 2018. The longest stort-term trend during this period was 4 losing days, which started on 26 Oct, 2018 and ended on 31 Oct, 2018. This bearish trend lost -5.17% of investor capital.

The last 12 months saw PSXP's investors making profits in 4 months and incurring losses in 8 months. PSXP was less consistent in delivering monthly returs than SP500 index. PSXP was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -7.59% compared to -7.28% returned by SP500 index in Oct 2018. PSXP had a longer winning streak of losing months than SP500 index. It went down in 4 straight months (from Aug 2018 to Nov 2018) during which period it delivered -16.4%. It is interesting to note that both PSXP and SP500 index significantly outperform during months when quarterly/annual results are announced.

"If all the economists were laid end to end, they'd never reach a conclusion.

PSXP 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 PSXP's volatility from 18 Sep, 2018 to 31 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 PSXP 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 PSXP. Therefore, SP500 must receive a lower allocation than PSXP in your portfolio. SP500 index usually has shorter drawdown period than PSXP.

Based on your interest in PSXP you may find it interesting to know that FSB and MGA have both performed similar to PSXP and can be considered by investors as alternative investment options.

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