SAFEGUARD SCIENTIFICS INC

8.99 -0.26 (-2.92%) Buy

SFE investors herd to book profits while the going is good

13 min read

SAFEGUARD SCIENTIFICS INC delivered massive losses on Monday. It lost -2.92% to close at 8.99. On a day when the overall market breadth was 34%, it closed higher than 77% of the market. In comparison, the benchmark SP500 index closed today at -0.0191%.

[Themes containing SFE]

Buy-and-Hold investors in SFE experienced a maximum drawdown of -19.1% over the last three months. It lost -9.65% during this down trending period. There were both Long and Short signals during this period, where the short signals were significantly more profitable than the long signals. The net profit from Short signals was +14.57%.

Trend

SFE has been outperforming the SP500 index in recent time. Over the last 2 years 11 months and 10 days, SFE underperformed the SP500 index on 52% days.

During the last three months SFE was mostly loss making and delivered on average -0.14% per day. It's best return during this period (of +6.47%) was on Monday, 3 Dec, 2018. While it's worst loss in the same period (of -8.04%) was on Friday, 21 Sep, 2018. There was initially a bullish trend during this period which started on 28 Sep, 2018 and went on till 3 Oct, 2018. The bullish trend returned +6.66% to investors. This was followed by a bearish trend that started on 17 Oct, 2018 and ended on 24 Oct, 2018. This bearish trend lost -7.77% of investor capital.

SFE had 6 profitable and 6 loss making months over the last year. During the last year, SFE underperformed SP500 index on monthly return basis. SFE significantly outperformed SP500 index in Jan 2018, when it returned +11.61% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. SFE had a longer winning streak of losing months than SP500 index. It went down in 5 straight months (from Jun 2018 to Oct 2018) during which period it delivered -43.0%.

"You don't want to have so much money going toward your mortgage every month that you can't enjoy life or take care of your other financial responsibilities.

SFE 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 SFE's volatility from 20 Sep, 2018 to 21 Sep, 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 SFE 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.

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

Based on your interest in SFE you may find it interesting to know that AAXN is a small cap that has shown remarkable performance and deserves to be on every investors' watchlist.

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