34.4 +0.02 (+0.06%) Sell

Don't go profit booking on TDS now, it delivered a decent return

13 min read

TELEPHONE & DATA SYSTEMS INC managed to outperform the broader market today. It surged by +0.06% to close at 34.4. It's recent 5 day performance has been -1.21%, -1.28%, +0.46%, -2.45% and +0.67%.

[Themes containing TDS]

TDS showed a strong bullish trend over the last 3 months. During this period TDS surged by +11.76% and saw a maximum drawdown of -10.57%. It has been unusually choppy during this period. Long term investors are better off avoiding investing in TDS till volatility reduces and a clear trend emerges.


TDS has been outperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 4 Apr, 2016 to 25 Jul, 2018. Over the last 2 years 11 months and 7 days, TDS outperformed the SP500 index on 50% days. Which indicates that on days TDS outperforms the SP500 index, it's performance is marginally better than on the days it underperforms the SP500 index.

TDS was profitable on 56% days in the last three months. During this time, it delivered on average +0.21% per day. It delivered it's best daily return of +14.62%, during this period, on Friday, 2 Nov, 2018. The longest stort-term trend during this period was 10 profitable days, which started on 27 Sep, 2018 and went on till 10 Oct, 2018. This bullish trend returned +8.71% to investors.

During the last year TDS had 7 profitable months and 5 loss making months. TDS returned profits in fewer months than SP500 index. TDS significantly outperformed SP500 index in Aug 2018, when it returned +18.97% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. TDS had a shorter streak of profitable months than SP500 index. It only went up in 4 straight months during the last year.

"I'm involved in the stock market, which is fun and, sometimes, very painful.

TDS is currently seeing overall fall in volatility. In comparison, the SP500 index is seeing increase in volatility. During the last three months, there was a significant surge in TDS's volatility from 21 Sep, 2018 to 2 Nov, 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 TDS 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 TDS. Therefore, SP500 must receive a lower allocation than TDS in your portfolio. SP500 index usually has shorter drawdown period than TDS.

On a general note (since you are interested in TDS), SQ is a mid cap that deserves to be closely tracked for investment opportunities.

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