QURATE RETAIL, INC.

19.54 -0.52 (-2.64%) Sell

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

13 min read

QURATE RETAIL, INC. delivered massive losses on Monday. It delivered -2.64% to close at 19.54. On a day when the overall market breadth was 34%, it closed higher than 67% of the market. In comparison, the benchmark SP500 index closed today at -0.0191%.

[Themes containing QRTEA]

Buy-and-Hold investors in QRTEA experienced a maximum drawdown of -20.31% over the last three months. It delivered -11.58% during this strong 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.

Trend

QRTEA has been underperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 24 Feb, 2016 to 29 Aug, 2018. Over the last 2 years 11 months and 10 days, QRTEA underperformed the SP500 index on 50% days. Which indicates that on days QRTEA underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months QRTEA delivered profits on 50% days. However, it still managed to end this period in a loss. It's best return during this period (of +4.74%) was on Thursday, 1 Nov, 2018. While it's worst loss in the same period (of -6.91%) was on Tuesday, 20 Nov, 2018. The longest stort-term trends during this period were 5 profitable and losing days. The bullish trend (which returned +6.79%) started on 11 Oct, 2018 and went on till 17 Oct, 2018 while the bearish trend (which returned -5.15%) started on 4 Oct, 2018 and went on till 10 Oct, 2018.

The last 12 months saw QRTEA's investors making profits in 7 months and incurring losses in 5 months. QRTEA was less consistent in delivering monthly returs than SP500 index. QRTEA significantly outperformed SP500 index in Jan 2018, when it returned +13.63% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. QRTEA had a shorter streak of profitable months than SP500 index. It only went up in 3 straight months during the last year. It is interesting to note that both QRTEA and SP500 index significantly outperform during months when quarterly/annual results are announced.

Courage is being scared to death, but saddling up anyway.
-- John Wayne

QRTEA is currently seeing overall fall in volatility. In comparison, the SP500 index is seeing increase in volatility. During the last three months, there was a significant surge in QRTEA's volatility from 21 Sep, 2018 to 20 Nov, 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 QRTEA has significant positive skewness in it's return distribution. This indicates that investors can expect QRTEA to recover from drawdowns quickly. Which makes QRTEA 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 QRTEA. Therefore, SP500 must receive a lower allocation than QRTEA in your portfolio. QRTEA usually has shorter drawdown period than the SP500 index.

On a general note (since you are interested in QRTEA), three instruments that are extremely volatile are OPNT, IMTE and ICPT. They must all be evaluated prudently and investors are better off avoiding them at the moment.

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