31.8 -0.69 (-2.18%) Sell

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

13 min read

TERADYNE, INC ranked among the worst performers on Monday. It fell by -2.18% to close at 31.8. On a day when the overall market breadth was 34%, it closed higher than 77% of the market. In comparison, the benchmark SP500 index closed today at -0.0191%.

[Themes containing TER]

TER showed a strong bearish trend over the last 3 months. During this period TER fell by -15.15% and saw a maximum drawdown of -21.38%. There were 2 short signals during this period that returned a cumulative of +15.88% to investors.


TER has been underperforming the SP500 index in recent time. It showed significant outperformance (compared to the SP500 index) from 12 May, 2016 to 21 Mar, 2018. Over the last 2 years 11 months and 10 days, TER outperformed the SP500 index on 57% days.

During the last three months TER was mostly loss making and delivered on average -0.23% per day. It's best return during this period (of +8.47%) was on Thursday, 25 Oct, 2018. While it's worst loss in the same period (of -6.12%) was on Wednesday, 24 Oct, 2018. The longest stort-term trend during this period was 6 losing days, which started on 3 Oct, 2018 and ended on 10 Oct, 2018. This bearish trend lost -12.27% of investor capital.

During the last year TER had 6 profitable months and 6 loss making months. TER returned profits in fewer months than SP500 index. TER was also a more risky investment than SP500 index as it's worst month in the last year, Apr 2018, returned -25.67% compared to -7.28% returned by SP500 index in Oct 2018. TER had a shorter streak of profitable months than SP500 index. It only went up in 3 straight months during the last year.

Making money from enforcing patents is no more wrong than investing in preferred stock.
-- Nathan Myhrvold

TER 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 TER's volatility from 18 Sep, 2018 to 30 Oct, 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 TER has significant positive skewness in it's return distribution. This indicates that investors can expect TER to recover from drawdowns quickly. Which makes TER a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

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

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

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