31.09 -0.08 (-0.26%) Sell

Search for alternative investments is on for TCP investors as it shows weakness

13 min read

TC PIPELINES LP ranked worse than it's peers on Friday. It returned -0.26% to close at 31.09. On a day when the overall market breadth was 35%, it closed higher than 67% of the market. In comparison, the benchmark SP500 index closed today at -0.0191%.

[Themes containing TCP]

TCP is currently in a down trend. Over the last three months trading short signals has not been a profitable strategy for TCP's investors in general. However, this strategy had significantly lower risk when compared to Buy-and-Hold investing (which returned -7.69%). It is therefore better to tread with caution in the current downtrend by limiting your allocation to TCP.


TCP has been outperforming the SP500 index in recent time. Over the last 2 years 11 months and 10 days, TCP underperformed the SP500 index on 53% days.

TCP returned losses on 67% days in the last three months. During this time, it delivered on average -0.1% per day. It delivered it's best daily return of +9.11%, during this period, on Thursday, 18 Oct, 2018. There was initially a bearish trend during this period which started on 18 Sep, 2018 and went on till 27 Sep, 2018. The trend delivered -10.7% losses to investors. This was followed by a bullish trend that started on 18 Oct, 2018 and ended on 22 Oct, 2018. This bullish trend delivered +11.38% to investors.

On monthly basis, TCP delivered profits and losses in equal number of months. TCP delivered profits less regularly than SP500 index. TCP was also a more risky investment than SP500 index as it's worst month in the last year, May 2018, returned -30.69% compared to -7.28% returned by SP500 index in Oct 2018. TCP had a shorter streak of profitable months than SP500 index. It only went up in 3 straight months during the last year. It is interesting to note that both TCP and SP500 index significantly outperform during months when quarterly/annual results are announced.

Success usually comes to those who are too busy to be looking for it.
-- Henry David Thoreau

TCP 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 TCP's volatility from 8 Oct, 2018 to 30 Nov, 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 TCP has positive skewness in it's return distribution. This indicates that investors can expect TCP to make attempts to recover from drawdowns quickly. Which makes TCP a good candidate for momentum based trading on short-term bullish trends or counter-trends.

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

On a general note (since you are interested in TCP), two instruments that deserve special mention are AYTU and SBOT. They have significantly outperformed the overall market.

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