29.63 -0.64 (-2.15%) Sell

Stop-loss on the minds of RMAX investors as it delivered massive losses

13 min read

RE/MAX HOLDINGS, INC. was among the worst performers on Friday. It lost -2.15% to close at 29.63 which is it's 52 week low, down -51% from it's 52 week high.

[Themes containing RMAX]

Buy-and-Hold investors in RMAX experienced a maximum drawdown of -33.94% over the last three months. It lost -33.34% during this strong down trending period. There were no long signals during this period, where the short signal generated good profits of +33.34% for investors.


RMAX has been underperforming the SP500 index in recent time, after having outperformed till 26 Oct, 2017. Over the last 2 years 11 months and 10 days, RMAX underperformed the SP500 index on 48% days. Which indicates that on days RMAX underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months RMAX was mostly loss making and delivered on average -0.6% per day. It's best return during this period (of +6.85%) was on Thursday, 1 Nov, 2018. While it's worst loss in the same period (of -12.07%) was on Friday, 2 Nov, 2018. There was initially a bearish trend during this period which started on 2 Nov, 2018 and went on till 16 Nov, 2018. The trend delivered -26.78% losses to investors. This was followed by a bullish trend that started on 26 Nov, 2018 and ended on 29 Nov, 2018. This bullish trend delivered +6.98% to investors.

RMAX had 4 profitable and 8 loss making months over the last year. During the last year, RMAX underperformed SP500 index on monthly return basis. RMAX was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -14.38% compared to -7.28% returned by SP500 index in Oct 2018. RMAX had a longer winning streak of losing months than SP500 index. It went down in 6 straight months (from Jul 2018 to Dec 2018) during which period it delivered -52.66%.

A successful man is one who can lay a firm foundation with the bricks others have thrown at him.
-- David Brinkley

RMAX 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 RMAX's volatility from 9 Oct, 2018 to 5 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 RMAX has significant positive skewness in it's return distribution. This indicates that investors can expect RMAX to recover from drawdowns quickly. Which makes RMAX 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 RMAX. Therefore, SP500 must receive a lower allocation than RMAX in your portfolio. RMAX usually has shorter drawdown period than the SP500 index.

On a general note (since you are interested in RMAX), AMRH has performed really well and deserves to be closely tracked for investment opportunities.

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