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

PRUDENTIAL PLC (Foreign) was among the worst performers on Thursday. It returned -0.64% to close at 35.75. On a day when the overall market breadth was 35%, it closed higher than 70% of the market. In comparison, the benchmark SP500 index closed today at -0.0002%.

[Themes containing PUK]

Buy-and-Hold investors in PUK experienced a maximum drawdown of -27.04% over the last three months. It returned -19.04% 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. The net profit from Short signals was +2.52%.

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PUK has been underperforming the SP500 index in recent time, after having outperformed till 5 Jan, 2016. Over the last 2 years 11 months and 9 days, PUK underperformed the SP500 index on 49% days. Which indicates that on days PUK underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months PUK was mostly loss making and delivered on average -0.32% per day. It's best return during this period (of +4.35%) was on Monday, 26 Nov, 2018. While it's worst loss in the same period (of -4.82%) was on Thursday, 6 Dec, 2018. There was initially a bearish trend during this period which started on 4 Oct, 2018 and went on till 15 Oct, 2018. The trend delivered -8.98% losses to investors. This was followed by a bullish trend that started on 29 Oct, 2018 and ended on 2 Nov, 2018. This bullish trend delivered +9.13% to investors.

On monthly basis, PUK delivered losses in more months over the last year, than profits. PUK delivered profits less regularly than SP500 index. PUK was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -12.63% compared to -7.28% returned by SP500 index in Oct 2018. PUK had a longer winning streak of losing months than SP500 index. It went down in 3 straight months (from Oct 2018 to Dec 2018) during which period it delivered -22.94%. It is interesting to note that both PUK and SP500 index significantly outperform during months when quarterly/annual results are announced.

"The way to become rich is to put all your eggs in one basket and then watch that basket.

PUK 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 PUK's volatility from 18 Sep, 2018 to 11 Dec, 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 PUK has significant positive skewness in it's return distribution. This indicates that investors can expect PUK to recover from drawdowns quickly. Which makes PUK 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 PUK. Therefore, SP500 must receive a lower allocation than PUK in your portfolio. PUK usually has shorter drawdown period than the SP500 index.

Based on your interest in PUK you may find it interesting to know that ABMD is a mid cap that has shown remarkable performance and deserves to be on every investors' watchlist.