WASTE MANAGEMENT INC

91.14 -0.24 (-0.26%) Buy

WM investors treading cautiously as performance is muted

13 min read

WASTE MANAGEMENT INC performed worse than the broader market on Friday. It lost -0.26% to close at 91.14. On a day when the overall market breadth was 35%, it closed higher than 8% of the market. In comparison, the benchmark SP500 index closed today at -0.0191%.

[Themes containing WM]

Buy-and-Hold investors in WM experienced a maximum drawdown of -8.29% over the last three months. It lost -1.05% during this down trending period. There were both Long and Short signals during this period, where the short signals were marginally more profitable than the long signals.

Trend

WM has been outperforming the SP500 index in recent time. WM is currently at it's peak outperformance to the SP500 index and can be considered for investment. Over the last 2 years 11 months and 10 days, WM outperformed the SP500 index on 55% days.

During the last three months WM was mostly loss making and delivered on average -0.01% per day. It's best return during this period (of +2.79%) was on Tuesday, 30 Oct, 2018. While it's worst loss in the same period (of -2.73%) was on Thursday, 25 Oct, 2018. There was initially a bearish trend during this period which started on 21 Sep, 2018 and went on till 26 Sep, 2018. The trend delivered -2.14% losses to investors. This was followed by a bullish trend that started on 5 Nov, 2018 and ended on 12 Nov, 2018. This bullish trend delivered +4.36% to investors.

WM had 5 profitable and 7 loss making months over the last year. During the last year, WM underperformed SP500 index on monthly return basis. WM significantly outperformed SP500 index in Jul 2018, when it returned +9.94% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. WM had a longer winning streak of losing months than SP500 index. It went down in 3 straight months (from Feb 2018 to Apr 2018) during which period it delivered -7.68%. It is interesting to note that both WM and SP500 index significantly outperform during months when quarterly/annual results are announced.

Wealth after all is a relative thing since he that has little and wants less is richer than he that has much and wants more.
-- Charles Caleb Colton

WM is becoming less volatile overall. In comparison, the SP500 index is seeing a rise in volatility. During the last three months, there was a significant surge in WM's volatility from 17 Sep, 2018 to 30 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 WM 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 WM. Therefore, SP500 must receive a lower allocation than WM in your portfolio. SP500 index usually has shorter drawdown period than WM.

On a general note (since you are interested in WM), three instruments that deserve special mention are NFEC, I and TNDM. They have all outperformed the market and must be closely watched for investment opportunities.

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