SF is a falling knife, continues to bleed every investor trying to catch it
17 Dec, 201813 min read
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STIFEL FINANCIAL CORP ranked among the worst performers on Monday. It lost -1.32% to close at 41.71. On a day when the overall market breadth was 34%, it closed higher than 14% of the market. In comparison, the benchmark SP500 index closed today at -0.0191%.
SF showed a strong down trend over the last 3 months. During this period SF lost -24.64% and saw a maximum drawdown of -25.08%. There were 2 short signals during this period that returned a cumulative of +23.42% to investors.
SF has been underperforming the SP500 index in recent time, after having outperformed till 12 Mar, 2018. Over the last 2 years 11 months and 10 days, SF underperformed the SP500 index on 49% days. Which indicates that on days SF underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.
During the last three months SF was mostly loss making and delivered on average -0.44% per day. It's best return during this period (of +3.3%) was on Wednesday, 31 Oct, 2018. While it's worst loss in the same period (of -5.6%) was on Wednesday, 24 Oct, 2018. There was initially a bearish trend during this period which started on 5 Oct, 2018 and went on till 12 Oct, 2018. The trend delivered -9.34% 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 +10.39% to investors.
SF had 6 profitable and 6 loss making months over the last year. During the last year, SF underperformed SP500 index on monthly return basis. SF was also a more risky investment than SP500 index as it's worst month in the last year, Dec 2018, returned -12.43% compared to -7.28% returned by SP500 index in Oct 2018. SF had a shorter streak of profitable months than SP500 index. It only went up in 2 straight months during the last year. It is interesting to note that both SF and SP500 index significantly outperform during months when quarterly/annual results are announced.
Never spend your money before you have earned it.
-- Thomas Jefferson
SF 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 SF's volatility from 25 Sep, 2018 to 4 Dec, 2018. While there was a significant surge in the SP500 index's volatility from 19 Sep, 2018 to 29 Oct, 2018.
Advanced/professional short-term investors should note that SF has significant positive skewness in it's return distribution. This indicates that investors can expect SF to recover from drawdowns quickly. Which makes SF a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.
SF has more chance of extreme outcomes than the SP500 index. Therefore, SF must receive a lower allocation than SP500 in your portfolio. SP500 index usually has shorter drawdown period than SF.
Based on your interest in SF you may find it interesting to know that UNH and AMZN are both large caps that have shown remarkable performance and deserve to be on every investors' watchlist.
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