54.51 -1.04 (-1.91%) Sell

STI is a falling knife, continues to bleed every investor trying to catch it

13 min read

SUNTRUST BANKS INC significantly underperformed on Tuesday. It returned -1.91% to close at 54.51 which is it's 52 week low, down -27% from it's 52 week high.

[Themes containing STI]

STI is currently in a down trend. The current bearish signal has generated a profit of +23.63% for investors in the last three months.


STI has been underperforming the SP500 index in recent time, after having outperformed till 21 Feb, 2018. Over the last 2 years 11 months and 7 days, STI outperformed the SP500 index on 52% days.

STI returned losses on 62% days in the last three months. During this time, it delivered on average -0.41% per day. It delivered it's worst daily return of -5.84%, during this period, on Tuesday, 4 Dec, 2018. There was initially a bullish trend during this period which started on 18 Sep, 2018 and went on till 20 Sep, 2018. The bullish trend returned +3.78% to investors. This was followed by a bearish trend that started on 21 Sep, 2018 and ended on 2 Oct, 2018. This bearish trend lost -7.27% of investor capital.

On monthly basis, STI delivered profits and losses in equal number of months. STI delivered profits less regularly than SP500 index. STI was also a more risky investment than SP500 index as it's worst month in the last year, Dec 2018, returned -13.05% compared to -7.28% returned by SP500 index in Oct 2018. STI 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 STI and SP500 index significantly outperform during months when quarterly/annual results are announced.

"Confronted with a challenge to distill the secret of sound investment into three words, we venture the motto, Margin of Safety.

STI 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 STI's volatility from 13 Sep, 2018 to 9 Oct, 2018. While there was a significant surge in the SP500 index's volatility from 14 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that STI has significant positive skewness in it's return distribution. This indicates that investors can expect STI to recover from drawdowns quickly. Which makes STI a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

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

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

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