11.68 -0.17 (-1.43%) Sell

WLH investors incur serious losses

13 min read

WILLIAM LYON HOMES has destroyed investor wealth on Thursday. It delivered -1.43% to close at 11.68. On a day when the overall market breadth was 35%, it closed higher than 78% of the market. In comparison, the benchmark SP500 index closed today at -0.0002%.

[Themes containing WLH]

WLH is currently in a bearish trend. Over the last three months 4 bearish signals have generated a profit of +19.82% for investors.


WLH has been underperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 3 Jan, 2018 to 15 Nov, 2018. Over the last 2 years 11 months and 9 days, WLH underperformed the SP500 index on 51% days.

During the last three months WLH was mostly loss making and delivered on average -0.74% per day. It's best return during this period (of +7.66%) was on Tuesday, 30 Oct, 2018. While it's worst loss in the same period (of -7.77%) was on Thursday, 20 Sep, 2018. The longest stort-term trend during this period was 8 losing days, which started on 6 Nov, 2018 and ended on 15 Nov, 2018. This bearish trend lost -19.16% of investor capital.

The last 12 months saw WLH's investors making profits in 2 months and incurring losses in 10 months. WLH was less consistent in delivering monthly returs than SP500 index. WLH was also a more risky investment than SP500 index as it's worst month in the last year, Sep 2018, returned -18.8% compared to -7.28% returned by SP500 index in Oct 2018. WLH had a longer winning streak of losing months than SP500 index. It went down in 8 straight months (from May 2018 to Dec 2018) during which period it delivered -74.39%.

Money is a terrible master but an excellent servant.
-- P.T. Barnum

WLH 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 WLH's volatility from 18 Sep, 2018 to 23 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 WLH has significant negative skewness in it's return distribution. This indicates that WLH is very risky for short-term investment and can significantly underperform for long durations.

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

On a general note (since you are interested in WLH), if you are evaluating WLH as an investment candidate, then you should read about GLOG which has delivered similar performance and can help diversify your portfolio.

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