9.07 +0.02 (+0.22%) Sell

Don't lose faith in SIM now, it delivered good returns

13 min read

SIM was among the best performers today. On a longer term basis, investors in GROUP SIMEC SA DE CV (Foreign) made -0.0% per day. Friday's performance of +0.22% was a significant outperformance compared to it's daily average.

[Themes containing SIM]

SIM showed a up trend over the last 3 months. During this period SIM returned +5.01% and saw a maximum drawdown of -15.76%. It has been unusually choppy during this period. Long term investors are better off avoiding investing in SIM till volatility reduces and a clear trend emerges.


SIM has been outperforming the SP500 index in recent time. Over the last 2 years 11 months and 10 days, SIM outperformed the SP500 index on 48% days. Which indicates that on days SIM outperforms the SP500 index, it's performance is marginally better than on the days it underperforms the SP500 index.

During the last three months SIM delivered losses on 54% days. However, it still managed to end this period in a profit. It's best return during this period (of +5.01%) was on Wednesday, 26 Sep, 2018. While it's worst loss in the same period (of -5.41%) was on Monday, 29 Oct, 2018. There was initially a bearish trend during this period which started on 20 Sep, 2018 and went on till 24 Sep, 2018. The trend delivered -2.34% losses to investors. This was followed by a bullish trend that started on 27 Nov, 2018 and ended on 3 Dec, 2018. This bullish trend delivered +7.87% to investors.

On monthly basis, SIM delivered profits in more months over the last year, than losses. SIM delivered profits less regularly than SP500 index. SIM was also a more risky investment than SP500 index as it's worst month in the last year, Aug 2018, returned -13.94% compared to -7.28% returned by SP500 index in Oct 2018. SIM 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 SIM and SP500 index significantly outperform during months when quarterly/annual results are announced.

It's good to have money and the things that money can buy, but It's good, too, to check up once in a while and make sure that you haven't lost the things that money can't buy.
-- George Lorimer

SIM 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 SIM's volatility from 17 Sep, 2018 to 11 Dec, 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 SIM has significant negative skewness in it's return distribution. This indicates that SIM is very risky for short-term investment and can significantly underperform for long durations.

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

On a general note (since you are interested in SIM), two small cap instruments that deserve special mention are AAXN and ZBRA. They have significantly outperformed the overall market.

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