WLFC is a falling knife, continues to bleed every investor trying to catch it
11 Dec, 201813 min read
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WILLIS LEASE FINANCE CORP was among the worst performers today. It fell by -3.28% to close at 34.81. It's recent 5 day performance has been +0.03%, -0.88%, -1.01%, -3.75% and +3.42%.
WLFC showed a bullish trend over the last 3 months. During this period WLFC surged by +1.4% and saw a maximum drawdown of -12.67%. There was a long signal during this period which returned +1.4%.
WLFC has been underperforming the SP500 index in recent time. It showed significant outperformance (compared to the SP500 index) from 15 Dec, 2017 to 6 Nov, 2018. Over the last 2 years 11 months and 7 days, WLFC outperformed the SP500 index on 52% days.
WLFC was profitable on 50% days in the last three months. During this time, it delivered on average +0.04% per day. It delivered it's best daily return of +8.49%, during this period, on Monday, 5 Nov, 2018. The longest stort-term trend during this period was 7 profitable days, which started on 13 Sep, 2018 and went on till 21 Sep, 2018. This bullish trend returned +1.94% to investors.
During the last year WLFC had 7 profitable months and 5 loss making months. WLFC returned profits in fewer months than SP500 index. WLFC significantly outperformed SP500 index in Mar 2018, when it returned +25.57% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. WLFC had a shorter streak of profitable months than SP500 index. It only went up in 4 straight months during the last year.
"When you're building a company, you need to continually strengthen every component - finance, strategic partnerships, executive team, and relationships with every last constituency.
WLFC 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 WLFC's volatility from 25 Sep, 2018 to 10 Dec, 2018. While there was a significant surge in the SP500 index's volatility from 13 Sep, 2018 to 29 Oct, 2018.
Advanced/professional short-term investors should note that WLFC has significant positive skewness in it's return distribution. This indicates that investors can expect WLFC to recover from drawdowns quickly. Which makes WLFC 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 WLFC. Therefore, SP500 must receive a lower allocation than WLFC in your portfolio. SP500 index usually has shorter drawdown period than WLFC.
On a general note (since you are interested in WLFC), two large cap instruments that deserve special mention are AMZN and PFE. They have significantly outperformed the overall market.
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