Stop-loss on the minds of TITN investors as it ranked worse than it's peers
17 Dec, 201813 min read
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TITAN MACHINERY INC. delivered massive losses on Monday. It lost -4.78% to close at 14.55. 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%.
Buy-and-Hold investors in TITN experienced a maximum drawdown of -24.35% over the last three months. It lost -15.9% 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.
TITN has been outperforming the SP500 index in recent time. Over the last 2 years 11 months and 10 days, TITN outperformed the SP500 index on 49% days. Which indicates that on days TITN outperforms the SP500 index, it's performance is marginally better than on the days it underperforms the SP500 index.
During the last three months TITN was mostly loss making and delivered on average -0.2% per day. It's best return during this period (of +25.6%) was on Thursday, 29 Nov, 2018. While it's worst loss in the same period (of -8.76%) was on Tuesday, 4 Dec, 2018. There was initially a bearish trend during this period which started on 21 Sep, 2018 and went on till 1 Oct, 2018. The trend delivered -15.3% losses to investors. This was followed by a bullish trend that started on 2 Oct, 2018 and ended on 8 Oct, 2018. This bullish trend delivered +6.3% to investors.
TITN had 3 profitable and 9 loss making months over the last year. During the last year, TITN underperformed SP500 index on monthly return basis. TITN significantly outperformed SP500 index in Nov 2018, when it returned +23.02% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. TITN had a longer winning streak of losing months than SP500 index. It went down in 4 straight months (from Apr 2018 to Jul 2018) during which period it delivered -40.73%. It is interesting to note that both TITN and SP500 index significantly outperform during months when quarterly/annual results are announced.
Try not to become a man of success. Rather become a man of value.
-- Albert Einstein
TITN 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 TITN's volatility from 19 Sep, 2018 to 29 Nov, 2018. While there was a significant surge in the SP500 index's volatility from 19 Sep, 2018 to 29 Oct, 2018.
Advanced/professional short-term investors should note that TITN has significant negative skewness in it's return distribution. This indicates that TITN is very risky for short-term investment and can significantly underperform for long durations.
SP500 index has more chance of extreme outcomes than TITN. Therefore, SP500 must receive a lower allocation than TITN in your portfolio. SP500 index usually has shorter drawdown period than TITN.
Based on your interest in TITN you may find it interesting to know that PFE, UNH and V are large caps that have all shown remarkable performance and qualify to be on every investor's watchlist.
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