20.66 +0.01 (+0.05%) Sell

WGO does a dead cat bounce, it's still too early to buy into it

13 min read

WINNEBAGO INDUSTRIES INC ranked among the best performers today. It delivered +0.05% to close at 20.66. During the last week it fell by -2.13% and saw a maximum drawdown of -2.37% before bouncing back.

[Themes containing WGO]

Buy-and-Hold investors in WGO experienced a maximum drawdown of -44.69% over the last three months. It fell by -44.61% during this strong bearish trending period. There were no long signals during this period, where the short signal generated good profits of +44.61% for investors.


WGO has been underperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 18 Dec, 2017 to 13 Dec, 2018. Over the last 2 years 11 months and 10 days, WGO underperformed the SP500 index on 49% days. Which indicates that on days WGO underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months WGO was mostly loss making and delivered on average -0.9% per day. It's best return during this period (of +4.66%) was on Tuesday, 30 Oct, 2018. While it's worst loss in the same period (of -12.29%) was on Thursday, 18 Oct, 2018. The longest stort-term trend during this period was 10 losing days, which started on 5 Nov, 2018 and ended on 16 Nov, 2018. This bearish trend lost -12.91% of investor capital.

During the last year WGO had 2 profitable months and 10 loss making months. WGO returned profits in fewer months than SP500 index. WGO was also a more risky investment than SP500 index as it's worst month in the last year, Jan 2018, returned -18.03% compared to -7.28% returned by SP500 index in Oct 2018. WGO had a longer winning streak of losing months than SP500 index. It went down in 6 straight months (from Jul 2018 to Dec 2018) during which period it delivered -62.18%.

If you took our top fifteen decisions out, we'd have a pretty average record. It wasn't hyperactivity, but a hell of a lot of patience. You stuck to your principles and when opportunities came along, you pounced on them with vigor.
-- Charlie Munger

WGO 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 WGO's volatility from 8 Oct, 2018 to 18 Oct, 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 WGO 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 WGO. Therefore, SP500 must receive a lower allocation than WGO in your portfolio. SP500 index usually has shorter drawdown period than WGO.

On a general note (since you are interested in WGO), two small cap instruments that deserve special mention are BURL and KEYS. They have significantly outperformed the overall market.

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