Prayers for TKR investors as it destroyed investor wealth

TIMKEN CO has destroyed investor wealth on Monday. It delivered -1.29% to close at 37.37. On a day when the overall market breadth was 34%, it closed higher than 71% of the market. In comparison, the benchmark SP500 index closed today at -0.0191%.

[Themes containing TKR]

TKR is currently in a bearish trend. Over the last three months 4 bearish signals have generated a profit of +6.21% for investors.

Trend

Monthly Performance

Alpha (outperformance)

Heatmap

Volatility

Return distribution

TKR has been underperforming the SP500 index in recent time. It showed significant outperformance (compared to the SP500 index) from 19 Jan, 2016 to 26 Apr, 2017. Over the last 2 years 11 months and 10 days, TKR outperformed the SP500 index on 50% days. Which indicates that on days TKR outperforms the SP500 index, it's performance is marginally better than on the days it underperforms the SP500 index.

During the last three months TKR was mostly loss making and delivered on average -0.43% per day. It's best return during this period (of +4.14%) was on Thursday, 20 Sep, 2018. While it's worst loss in the same period (of -5.55%) was on Wednesday, 24 Oct, 2018. The longest stort-term trend during this period was 8 losing days, which started on 4 Oct, 2018 and ended on 15 Oct, 2018. This bearish trend lost -15.59% of investor capital.

The last 12 months saw TKR's investors making profits in 6 months and incurring losses in 6 months. TKR was less consistent in delivering monthly returs than SP500 index. TKR was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -20.66% compared to -7.28% returned by SP500 index in Oct 2018. TKR had no profitable months, compared to 6 consecutive months of profit by SP500 index during the period Apr 2018 to Sep 2018.

"There are two kinds of investors, be they large or small: those who don't know where the market is headed, and those who don't know that they don't know. Then again, there is a third type of investor -the investment professional, who indeed knows that he or she doesn't know, but whose livelihood depends upon appearing to know.

TKR 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 TKR's volatility from 3 Oct, 2018 to 30 Oct, 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 TKR has significant positive skewness in it's return distribution. This indicates that investors can expect TKR to recover from drawdowns quickly. Which makes TKR 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 TKR. Therefore, SP500 must receive a lower allocation than TKR in your portfolio. TKR usually has shorter drawdown period than the SP500 index.

On a general note (since you are interested in TKR), two mid cap instruments that deserve special mention are AMD and SQ. They have significantly outperformed the overall market.