376.45 -9.31 (-2.47%) Sell

Don't even consider investing in SHW now, it is an investor's nightmare

13 min read

SHERWIN WILLIAMS CO significantly underperformed today. It lost -2.47% to close at 376.45. It's recent 5 day performance has been +0.03%, -1.45%, +0.18%, -0.66% and +1.02%.

[Themes containing SHW]

SHW showed a strong down trend over the last 3 months. During this period SHW lost -20.41% and saw a maximum drawdown of -23.28%. There was a short signal during this period which returned +14.87%.


SHW has been underperforming the SP500 index in recent time, after having outperformed till 19 Sep, 2018. Over the last 2 years 11 months and 10 days, SHW outperformed the SP500 index on 53% days.

During the last three months SHW was mostly loss making and delivered on average -0.35% per day. It's best return during this period (of +4.93%) was on Tuesday, 30 Oct, 2018. While it's worst loss in the same period (of -5.13%) was on Thursday, 25 Oct, 2018. There was initially a bearish trend during this period which started on 21 Sep, 2018 and went on till 28 Sep, 2018. The trend delivered -4.86% losses to investors. This was followed by a bullish trend that started on 30 Oct, 2018 and ended on 8 Nov, 2018. This bullish trend delivered +12.65% to investors.

SHW had 6 profitable and 6 loss making months over the last year. During the last year, SHW underperformed SP500 index on monthly return basis. SHW was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -13.9% compared to -7.28% returned by SP500 index in Oct 2018. SHW had a shorter streak of profitable months than SP500 index. It only went up in 4 straight months during the last year.

"Under capitalism, man exploits man. Under communism, it's just the opposite.

SHW 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 SHW's volatility from 20 Sep, 2018 to 30 Oct, 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 SHW has significant positive skewness in it's return distribution. This indicates that investors can expect SHW to recover from drawdowns quickly. Which makes SHW a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

Investors trading in SHW derivatives at this moment can consider 'Covered Call' options strategy to receive better risk-adjusted returns.

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

Based on your interest in SHW you may find it interesting to know that NVCN, ICPT and VIPS are all extremely risky investment candidates that must be evaluated carefully. Investors with low risk profile are better off avoiding them till their performance becomes more consistent.

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