14.33 +0.18 (+1.27%) Sell

SPLP investors hold onto their investments as it marginally outperforms

13 min read

STEEL PARTNERS HOLDINGS L.P. was among the best performers on Tuesday. It returned +1.27% to close at 14.33. On a day when the overall market breadth was 35%, it closed higher than 15% of the market. In comparison, the benchmark SP500 index closed today at -0.0004%.

[Themes containing SPLP]

Buy-and-Hold investors in SPLP experienced a maximum drawdown of -19.19% over the last three months. It lost -13.41% 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 +7.99%.


SPLP has been underperforming the SP500 index in recent time, after having outperformed till 28 Mar, 2017. Over the last 2 years 11 months and 7 days, SPLP underperformed the SP500 index on 50% days. Which indicates that on days SPLP underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months SPLP was mostly loss making and delivered on average -0.23% per day. It's best return during this period (of +2.77%) was on Wednesday, 19 Sep, 2018. While it's worst loss in the same period (of -8.18%) was on Friday, 2 Nov, 2018. There was initially a bullish trend during this period which started on 19 Sep, 2018 and went on till 24 Sep, 2018. The bullish trend returned +4.56% to investors. This was followed by a bearish trend that started on 8 Oct, 2018 and ended on 12 Oct, 2018. This bearish trend lost -2.42% of investor capital.

SPLP had 3 profitable and 9 loss making months over the last year. During the last year, SPLP underperformed SP500 index on monthly return basis. SPLP was also a more risky investment than SP500 index as it's worst month in the last year, Nov 2018, returned -10.7% compared to -7.28% returned by SP500 index in Oct 2018. SPLP had a longer winning streak of losing months than SP500 index. It went down in 4 straight months (from Sep 2018 to Dec 2018) during which period it delivered -16.02%.

What we really want to do is what we are really meant to do. When we do what we are meant to do, money comes to us, doors open for us, we feel useful, and the work we do feels like play to us.
-- Julia Cameron

SPLP 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 fall in SPLP's volatility from 13 Sep, 2018 to 24 Oct, 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 SPLP 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 SPLP. Therefore, SP500 must receive a lower allocation than SPLP in your portfolio. SP500 index usually has shorter drawdown period than SPLP.

Based on your interest in SPLP you may find it interesting to know that PFE, AMZN and V are large caps that have all shown remarkable performance and qualify to be on every investor's watchlist.

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