25.78 -1.0 (-3.88%) Buy

Don't consider buying TLK now, it is risky at the moment

13 min read

PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA TBK (Foreign) has destroyed investor wealth today. It lost -3.88% to close at 25.78. It's recent 5 day performance has been +5.67%, +1.89%, -0.48%, -0.56% and -1.79%.

[Themes containing TLK]

TLK showed a strong up trend over the last 3 months. During this period TLK returned +10.55% and saw a maximum drawdown of -10.81%. It has been unusually choppy during this period. Long term investors are better off avoiding investing in TLK till volatility reduces and a clear trend emerges.


TLK has been outperforming the SP500 index in recent time. Over the last 2 years 11 months and 10 days, TLK underperformed the SP500 index on 49% days. Which indicates that on days TLK underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months TLK delivered losses on 51% days. However, it still managed to end this period in a profit. It's best return during this period (of +7.15%) was on Tuesday, 30 Oct, 2018. While it's worst loss in the same period (of -5.27%) was on Wednesday, 24 Oct, 2018. There was initially a bullish trend during this period which started on 11 Oct, 2018 and went on till 17 Oct, 2018. The bullish trend returned +9.32% to investors. This was followed by a bearish trend that started on 8 Nov, 2018 and ended on 14 Nov, 2018. This bearish trend lost -4.33% of investor capital.

TLK had 5 profitable and 7 loss making months over the last year. During the last year, TLK underperformed SP500 index on monthly return basis. TLK was also a more risky investment than SP500 index as it's worst month in the last year, May 2018, returned -9.32% compared to -7.28% returned by SP500 index in Oct 2018. TLK 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 TLK and SP500 index significantly outperform during months when quarterly/annual results are announced.

"Finance is a gun. Politics is knowing when to pull the trigger.

TLK 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 TLK's volatility from 17 Sep, 2018 to 14 Dec, 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 TLK has significant positive skewness in it's return distribution. This indicates that investors can expect TLK to recover from drawdowns quickly. Which makes TLK a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

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

On a general note (since you are interested in TLK), if you are an investor in VIPS, you need to be extra careful (consider limiting your exposure or diversifying) as it is extremely unpredictable and therefore risky.

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