75.29 -3.71 (-4.92%) Sell

WAB is a falling knife, continues to bleed every investor trying to catch it

13 min read

WAB ranked among the worst performers today. On a longer term basis, investors in WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORP made -0.03% per day. Thursday's performance of -4.92% was a significant underperformance compared to it's daily average.

[Themes containing WAB]

Buy-and-Hold investors in WAB experienced a maximum drawdown of -29.56% over the last three months. It returned -23.34% during this strong down 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 +12.86%.


WAB has been underperforming the SP500 index in recent time, after having outperformed till 7 Sep, 2018. Over the last 2 years 11 months and 9 days, WAB underperformed the SP500 index on 48% days. Which indicates that on days WAB underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months WAB was mostly loss making and delivered on average -0.39% per day. It's best return during this period (of +7.02%) was on Monday, 17 Sep, 2018. While it's worst loss in the same period (of -4.96%) was on Tuesday, 30 Oct, 2018. There was initially a bullish trend during this period which started on 14 Sep, 2018 and went on till 18 Sep, 2018. The bullish trend returned +7.29% to investors. This was followed by a bearish trend that started on 3 Dec, 2018 and ended on 13 Dec, 2018. This bearish trend lost -22.43% of investor capital.

On monthly basis, WAB delivered profits in more months over the last year, than losses. WAB delivered profits less regularly than SP500 index. WAB was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -21.12% compared to -7.28% returned by SP500 index in Oct 2018. WAB and SP500 index, both had periods of 6 consecutive profitable months. It is interesting to note that both WAB and SP500 index significantly outperform during months when quarterly/annual results are announced.

Investment philosophy is the clear understanding that by owning shares of stocks he owns businesses, not pieces of paper.
-- Warren Edward Buffett

WAB is becoming more volatile overall. In comparison, the SP500 index is seeing a rise in volatility. During the last three months, there was a significant fall in WAB's volatility from 14 Sep, 2018 to 5 Oct, 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 WAB has significant positive skewness in it's return distribution. This indicates that investors can expect WAB to recover from drawdowns quickly. Which makes WAB 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 WAB. Therefore, SP500 must receive a lower allocation than WAB in your portfolio. WAB usually has shorter drawdown period than the SP500 index.

Based on your interest in WAB you may find it interesting to know that TWTR is a mid cap that has shown remarkable performance and deserves to be on every investors' watchlist.

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