1.68 +0.07 (+4.35%) Buy

RENN continues to mint money for it's investors

13 min read

RENREN INC. (Foreign) outperformed on Friday. It surged by +4.35% to close at 1.68. On a day when the overall market breadth was 35%, it closed higher than 8% of the market. In comparison, the benchmark SP500 index closed today at -0.0233%.

[Themes containing RENN]

RENN is currently in a bullish trend. Over the last three months Buy-and-Hold has been a better strategy (returning +22.63%) for RENN's investors than trading long signals.


RENN has been outperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 4 Jan, 2016 to 1 Oct, 2018. Over the last 2 years 11 months and 3 days, RENN underperformed the SP500 index on 53% days.

RENN returned losses on 59% days in the last three months. During this time, it delivered on average +0.62% per day. It delivered it's best daily return of +57.66%, during this period, on Tuesday, 11 Sep, 2018. The longest stort-term trend during this period was 7 losing days, which started on 22 Oct, 2018 and ended on 30 Oct, 2018. This bearish trend lost -25.6% of investor capital.

The last 12 months saw RENN's investors making profits in 4 months and incurring losses in 8 months. RENN was less consistent in delivering monthly returs than SP500 index. RENN was also a more risky investment than SP500 index as it's worst month in the last year, Jun 2018, returned -71.9% compared to -7.28% returned by SP500 index in Oct 2018. RENN had a longer winning streak of losing months than SP500 index. It went down in 5 straight months (from May 2018 to Sep 2018) during which period it delivered -122.61%. It is interesting to note that both RENN and SP500 index significantly outperform during months when quarterly/annual results are announced.

Outcome is simply the final score: Who won the game; what numbers came up in a roll of the dice; how high did a stock go. Outcome is the result, regardless of the method used to achieve it. It is not controllable.
-- Barry Ritholtz

RENN 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 RENN's volatility from 10 Sep, 2018 to 11 Sep, 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 RENN has significant positive skewness in it's return distribution. This indicates that investors can expect RENN to recover from drawdowns quickly. Which makes RENN 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 RENN. Therefore, SP500 must receive a lower allocation than RENN in your portfolio. RENN usually has shorter drawdown period than the SP500 index.

Based on your interest in RENN you may find it interesting to know that CSCO and AMZN are both large caps that have shown remarkable performance and deserve to be on every investors' watchlist.

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