11.03 -0.32 (-2.9%) Sell

Don't even consider investing in VGR now, it is a risky investment

13 min read

VECTOR GROUP LTD was among the worst performers on Tuesday. It delivered -2.9% to close at 11.03 which is it's 52 week low, down -49% from it's 52 week high.

[Themes containing VGR]

VGR showed a strong bearish trend over the last 3 months. During this period VGR delivered -27.3% and saw a maximum drawdown of -27.3%. There were 3 short signals during this period that returned a cumulative of +17.11% to investors.


VGR has been underperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 2 Feb, 2016 to 4 Oct, 2018. Over the last 2 years 11 months and 7 days, VGR underperformed the SP500 index on 50% days. Which indicates that on days VGR underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months VGR was mostly loss making and delivered on average -0.5% per day. It's best return during this period (of +3.07%) was on Thursday, 8 Nov, 2018. While it's worst loss in the same period (of -4.01%) was on Tuesday, 27 Nov, 2018. The longest stort-term trend during this period was 8 losing days, which started on 16 Nov, 2018 and ended on 28 Nov, 2018. This bearish trend lost -12.82% of investor capital.

The last 12 months saw VGR's investors making profits in 1 months and incurring losses in 11 months. VGR was less consistent in delivering monthly returs than SP500 index. VGR was also a more risky investment than SP500 index as it's worst month in the last year, Aug 2018, returned -15.83% compared to -7.28% returned by SP500 index in Oct 2018. VGR had a longer winning streak of losing months than SP500 index. It went down in 9 straight months (from Apr 2018 to Dec 2018) during which period it delivered -50.27%. It is interesting to note that both VGR and SP500 index significantly outperform during months when quarterly/annual results are announced.

Never invest emergency savings in the stock market.
-- Suze Orman

VGR is currently seeing overall increase in volatility. In comparison, the SP500 index is seeing increase in volatility. During the last three months, there was a significant surge in VGR's volatility from 13 Sep, 2018 to 11 Dec, 2018. While there was a significant surge in the SP500 index's volatility from 13 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that VGR has significant positive skewness in it's return distribution. This indicates that investors can expect VGR to recover from drawdowns quickly. Which makes VGR 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 VGR. Therefore, SP500 must receive a lower allocation than VGR in your portfolio. SP500 index usually has shorter drawdown period than VGR.

On a general note (since you are interested in VGR), HQY is a small cap that deserves to be closely tracked for investment opportunities.

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