TSEM investors looking to cut their losses short
07 Dec, 201813 min read
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TSEM underperformed today. On a longer term basis, investors in TOWER SEMICONDUCTOR LTD (Foreign) made +0.08% per day. Friday's performance of -0.06% was a underperformance compared to it's daily average.
Buy-and-Hold investors in TSEM experienced a maximum drawdown of -37.84% over the last three months. It fell by -24.4% during this strong bearish trending period. There were both Long and Short signals during this period, where the short signals were significantly more profitable than the long signals. The net profit from Short signals was +16.9%.
TSEM has been outperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 24 Nov, 2017 to 12 Nov, 2018. Over the last 2 years 11 months and 3 days, TSEM underperformed the SP500 index on 49% days. Which indicates that on days TSEM underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.
TSEM returned losses on 53% days in the last three months. During this time, it delivered on average -0.37% per day. It delivered it's worst daily return of -21.24%, during this period, on Monday, 29 Oct, 2018. The longest stort-term trend during this period was 7 profitable days, which started on 10 Sep, 2018 and went on till 18 Sep, 2018. This bullish trend returned +5.6% to investors.
During the last year TSEM had 4 profitable months and 8 loss making months. TSEM returned profits in fewer months than SP500 index. TSEM was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -26.96% compared to -7.28% returned by SP500 index in Oct 2018. TSEM had a longer winning streak of losing months than SP500 index. It went down in 3 straight months (from Feb 2018 to Apr 2018) during which period it delivered -27.03%.
Every time you borrow money, you're robbing your future self.
-- Nathan W. Morris
TSEM 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 TSEM's volatility from 28 Sep, 2018 to 1 Nov, 2018. While there was a significant surge in the SP500 index's volatility from 10 Sep, 2018 to 29 Oct, 2018.
Advanced/professional short-term investors should note that TSEM 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 TSEM. Therefore, SP500 must receive a lower allocation than TSEM in your portfolio. SP500 index usually has shorter drawdown period than TSEM.
Based on your interest in TSEM you may find it interesting to know that GIGM and EZPW have both performed similar to TSEM and can be considered by investors as alternative investment options.
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