TAIWAN SEMICONDUCTOR MANUFACTURING CO LTD (Foreign) ranked among the worst performers on Friday. It delivered -2.14% to close at 36.53. On a day when the overall market breadth was 35%, it closed higher than 77% of the market. In comparison, the benchmark SP500 index closed today at -0.0191%.
TSM showed a strong bearish trend over the last 3 months. During this period TSM delivered -16.52% and saw a maximum drawdown of -20.61%. There was a short signal during this period which returned +13.91%.
TSM has been outperforming the SP500 index in recent time. It showed significant outperformance (compared to the SP500 index) from 12 Jan, 2016 to 22 Jan, 2018. Over the last 2 years 11 months and 10 days, TSM outperformed the SP500 index on 52% days.
During the last three months TSM was mostly loss making and delivered on average -0.27% per day. It's best return during this period (of +3.99%) was on Tuesday, 30 Oct, 2018. While it's worst loss in the same period (of -4.28%) was on Friday, 16 Nov, 2018. The longest stort-term trend during this period was 6 losing days, which started on 4 Oct, 2018 and ended on 11 Oct, 2018. This bearish trend lost -11.06% of investor capital.
The last 12 months saw TSM's investors making profits in 6 months and incurring losses in 6 months. TSM was less consistent in delivering monthly returs than SP500 index. TSM was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -14.69% compared to -7.28% returned by SP500 index in Oct 2018. TSM 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 TSM and SP500 index significantly outperform during months when quarterly/annual results are announced.
Empty pockets never held anyone back. Only empty heads and empty hearts can do that.
-- Norman Vincent Peale
TSM 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 TSM's volatility from 21 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 TSM has significant positive skewness in it's return distribution. This indicates that investors can expect TSM to recover from drawdowns quickly. Which makes TSM a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.
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