V investors update their stop-losses higher

VISA INC. ranked among the best performers on Tuesday. It delivered +0.96% to close at 132.66. On a day when the overall market breadth was 34%, it closed higher than 5% of the market. In comparison, the benchmark SP500 index closed today at +0.01%.

[Themes containing V]

Buy-and-Hold investors in V experienced a maximum drawdown of -12.86% over the last three months. It delivered -10.01% 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 +6.51%.

Trend

Monthly Performance

Alpha (outperformance)

Heatmap

Volatility

Return distribution

V has been underperforming the SP500 index in recent time. It showed significant outperformance (compared to the SP500 index) from 22 Dec, 2016 to 1 Oct, 2018. Over the last 2 years 11 months and 14 days, V outperformed the SP500 index on 57% days.

During the last three months V was mostly loss making and delivered on average -0.15% per day. It's best return during this period (of +4.73%) was on Friday, 12 Oct, 2018. While it's worst loss in the same period (of -4.77%) was on Wednesday, 10 Oct, 2018. The longest stort-term trend during this period was 5 losing days, which started on 2 Oct, 2018 and ended on 8 Oct, 2018. This bearish trend lost -6.03% of investor capital.

The last 12 months saw V's investors making profits in 8 months and incurring losses in 4 months. During the last year, V and SP500 index had the same number of profitable months. V was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -8.58% compared to -7.75% returned by SP500 index in Dec 2018. V and SP500 index, both had periods of 6 consecutive profitable months. It is interesting to note that both V and SP500 index significantly outperform during months when quarterly/annual results are announced.

"Money is like manure. You have to spread it around or it smells.

V 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 V's volatility from 1 Oct, 2018 to 29 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 V 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.

Investors trading in V derivatives at this moment can consider 'Covered Call' options strategy to receive better risk-adjusted returns.

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

Based on your interest in V you may find it interesting to know that SCHL, CMI and GPC have all performed similar to V and qualify as alternative investment candidates that must be evaluated for diversification.