SAFETY INSURANCE GROUP INC

86.17 -0.32 (-0.37%) Sell

Prayers for SAFT investors as it destroyed investor wealth

13 min read

SAFETY INSURANCE GROUP INC significantly underperformed on Tuesday. It delivered -0.37% to close at 86.17. On a day when the overall market breadth was 35%, it closed higher than 75% of the market. In comparison, the benchmark SP500 index closed today at -0.0004%.

[Themes containing SAFT]

SAFT is currently in a bearish trend. Over the last three months 2 bearish signals have generated a profit of +7.4% for investors.

Trend

SAFT has been outperforming the SP500 index in recent time. It showed significant outperformance (compared to the SP500 index) from 28 Feb, 2018 to 6 Sep, 2018. Over the last 2 years 11 months and 7 days, SAFT outperformed the SP500 index on 52% days.

SAFT returned losses on 55% days in the last three months. During this time, it delivered on average -0.16% per day. It delivered it's worst daily return of -3.94%, during this period, on Tuesday, 4 Dec, 2018. The longest stort-term trend during this period was 6 profitable days, which started on 1 Nov, 2018 and went on till 8 Nov, 2018. This bullish trend returned +5.84% to investors.

The last 12 months saw SAFT's investors making profits in 6 months and incurring losses in 6 months. SAFT was less consistent in delivering monthly returs than SP500 index. SAFT was also a more risky investment than SP500 index as it's worst month in the last year, Feb 2018, returned -8.11% compared to -7.28% returned by SP500 index in Oct 2018. SAFT 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 SAFT and SP500 index significantly outperform during months when quarterly/annual results are announced.

"The financial markets generally are unpredictable. So that one has to have different scenarios... The idea that you can actually predict what's going to happen contradicts my way of looking at the market.

SAFT 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 SAFT's volatility from 13 Sep, 2018 to 31 Oct, 2018. While there was a significant surge in the SP500 index's volatility from 13 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that SAFT 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.

SAFT has more chance of extreme outcomes than the SP500 index. Therefore, SAFT must receive a lower allocation than SP500 in your portfolio. SP500 index usually has shorter drawdown period than SAFT.

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

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