VIV investors rejoice as it outperforms
13 Dec, 201813 min read
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TELEFONICA BRASIL S.A. (Foreign) outperformed today. It surged by +0.99% to close at 12.2. During the last week it surged by +2.09% and saw a maximum drawdown of -0.92% before bouncing back.
VIV is currently in a bullish trend. Over the last three months 2 bullish signals in VIV have generated a profit of +17.07% for investors.
VIV has been outperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 6 Sep, 2016 to 19 Sep, 2018. Over the last 2 years 11 months and 9 days, VIV outperformed the SP500 index on 52% days.
VIV returned losses on 54% days in the last three months. During this time, it delivered on average +0.42% per day. It delivered it's best daily return of +12.21%, during this period, on Tuesday, 30 Oct, 2018. The longest stort-term trend during this period was 6 losing days, which started on 5 Nov, 2018 and ended on 12 Nov, 2018. This bearish trend lost -4.7% of investor capital.
The last 12 months saw VIV's investors making profits in 4 months and incurring losses in 8 months. VIV was less consistent in delivering monthly returs than SP500 index. VIV significantly outperformed SP500 index in Oct 2018, when it returned +19.71% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. VIV had a longer winning streak of losing months than SP500 index. It went down in 8 straight months (from Feb 2018 to Sep 2018) during which period it delivered -50.01%. It is interesting to note that both VIV and SP500 index significantly outperform during months when quarterly/annual results are announced.
Money won't create success, the freedom to make it will.
-- Nelson Mandela
VIV 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 fall in VIV's volatility from 30 Oct, 2018 to 3 Dec, 2018. While there was a significant surge in the SP500 index's volatility from 14 Sep, 2018 to 29 Oct, 2018.
Advanced/professional short-term investors should note that VIV 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.
VIV has more chance of extreme outcomes than the SP500 index. Therefore, VIV must receive a lower allocation than SP500 in your portfolio. SP500 index usually has shorter drawdown period than VIV.
On a general note (since you are interested in VIV), three small cap instruments that deserve special mention are EHC, ZBRA and AAXN. They have all outperformed the market and must be closely watched for investment opportunities.
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