60.62 -0.15 (-0.25%) Sell

Looking to invest in WB? Avoid at the moment as it was among the worst performers

13 min read

WEIBO CORP (Foreign) was among the worst performers on Tuesday. It fell by -0.25% to close at 60.62. On a day when the overall market breadth was 34%, it closed higher than 87% of the market. In comparison, the benchmark SP500 index closed today at +0.01%.

[Themes containing WB]

WB showed a strong bearish trend over the last 3 months. During this period WB fell by -20.14% and saw a maximum drawdown of -29.72%. There were 2 short signals during this period that returned a cumulative of +8.65% to investors.


WB has been outperforming the SP500 index in recent time. It showed significant outperformance (compared to the SP500 index) from 12 Feb, 2016 to 14 Feb, 2018. Over the last 2 years 11 months and 14 days, WB outperformed the SP500 index on 52% days.

During the last three months WB was mostly loss making and delivered on average -0.28% per day. It's best return during this period (of +12.27%) was on Thursday, 1 Nov, 2018. While it's worst loss in the same period (of -7.25%) was on Wednesday, 10 Oct, 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 -21.16% of investor capital.

During the last year WB had 2 profitable months and 10 loss making months. WB returned profits in fewer months than SP500 index. WB was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -18.63% compared to -7.75% returned by SP500 index in Dec 2018. WB had a longer winning streak of losing months than SP500 index. It went down in 9 straight months (from Feb 2018 to Oct 2018) during which period it delivered -70.51%. It is interesting to note that both WB and SP500 index significantly outperform during months when quarterly/annual results are announced.

The habit of saving is itself an education; it fosters every virtue, teaches self-denial, cultivates the sense of order, trains to forethought, and so broadens the mind.
-- T.T. Munger

WB 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 WB's volatility from 27 Sep, 2018 to 1 Nov, 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 WB 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 WB derivatives at this moment can consider 'Married Put' options strategy to receive better risk-adjusted returns.

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

Based on your interest in WB you may find it interesting to know that RHT and LULU are both mid caps that have shown remarkable performance and deserve to be on every investors' watchlist.

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