500.COM LTD (FOREIGN)

7.88 -0.46 (-5.85%) Sell

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

13 min read

500.COM LTD (Foreign) is a falling knife that can bleed you if you catch it today. It fell by -5.85% to close at 7.88. It's recent 5 day performance has been +1.21%, -0.96%, +5.43%, -1.98% and +4.66%.

[Themes containing WBAI]

WBAI showed a strong bearish trend over the last 3 months. During this period WBAI fell by -30.94% and saw a maximum drawdown of -40.31%. There was a short signal during this period which returned +30.94%.

Trend

WBAI has been outperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 21 Jan, 2016 to 18 Oct, 2018. Over the last 2 years 11 months and 10 days, WBAI underperformed the SP500 index on 49% days. Which indicates that on days WBAI underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months WBAI was mostly loss making and delivered on average -0.5% per day. It's best return during this period (of +10.57%) was on Friday, 2 Nov, 2018. While it's worst loss in the same period (of -13.3%) was on Thursday, 18 Oct, 2018. The longest stort-term trend during this period was 4 losing days, which started on 22 Oct, 2018 and ended on 25 Oct, 2018. This bearish trend lost -6.0% of investor capital.

During the last year WBAI had 7 profitable months and 5 loss making months. WBAI returned profits in fewer months than SP500 index. WBAI significantly outperformed SP500 index in Feb 2018, when it returned +43.44% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. WBAI had a longer winning streak of losing months than SP500 index. It went down in 3 straight months (from Aug 2018 to Oct 2018) during which period it delivered -55.94%. It is interesting to note that both WBAI and SP500 index significantly outperform during months when quarterly/annual results are announced.

I understand that finance can be very complex.
-- Kevin Harrington

WBAI 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 WBAI's volatility from 18 Sep, 2018 to 18 Oct, 2018. While there was a significant surge in the SP500 index's volatility from 25 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that WBAI 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.

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

Based on your interest in WBAI you may find it interesting to know that UNH, MSFT and AMZN are large caps that have all shown remarkable performance and qualify to be on every investor's watchlist.

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