12.28 +0.13 (+1.07%) Buy

Profit booking on the minds of SFL investors as it shows marginal outperformance

13 min read

SFL managed to marginally outperform the broader market today. On a longer term basis, investors in SHIP FINANCE INTERNATIONAL LTD (Foreign) made -0.01% per day. Wednesday's performance of +1.07% was a significant outperformance compared to it's daily average.

[Themes containing SFL]

Buy-and-Hold investors in SFL experienced a maximum drawdown of -15.11% over the last three months. It lost -10.69% during this strong 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 +4.8%.


SFL has been outperforming the SP500 index in recent time. Over the last 2 years 11 months and 8 days, SFL underperformed the SP500 index on 50% days. Which indicates that on days SFL underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

SFL returned losses on 51% days in the last three months. During this time, it delivered on average -0.17% per day. It delivered it's best daily return of +5.67%, during this period, on Wednesday, 21 Nov, 2018. There was initially a bullish trend during this period which started on 19 Sep, 2018 and went on till 25 Sep, 2018. The bullish trend returned +1.82% to investors. This was followed by a bearish trend that started on 8 Nov, 2018 and ended on 14 Nov, 2018. This bearish trend lost -6.05% of investor capital.

SFL had 3 profitable and 9 loss making months over the last year. During the last year, SFL underperformed SP500 index on monthly return basis. SFL was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -10.52% compared to -7.28% returned by SP500 index in Oct 2018. SFL had a longer winning streak of losing months than SP500 index. It went down in 4 straight months (from Jul 2018 to Oct 2018) during which period it delivered -16.06%.

"The road to economic well-being is to reward productive economic activity and to provide a moderate and predictable growth of money to finance real economic growth without reigniting the fires of inflation.

SFL 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 SFL's volatility from 25 Sep, 2018 to 21 Nov, 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 SFL has significant positive skewness in it's return distribution. This indicates that investors can expect SFL to recover from drawdowns quickly. Which makes SFL 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 SFL. Therefore, SP500 must receive a lower allocation than SFL in your portfolio. SP500 index usually has shorter drawdown period than SFL.

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

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