16.59 -0.06 (-0.36%) Sell

WPM investors looking to preserve capital

13 min read

WPM ranked among the worst performers today. On a longer term basis, investors in WHEATON PRECIOUS METALS CORP. (Foreign) made +0.48% per day. Thursday's performance of -0.36% was a significant underperformance compared to it's daily average.

[Themes containing WPM]

Buy-and-Hold investors in WPM experienced a maximum drawdown of -13.59% over the last three months. It returned +4.01% during this up trending period. There were no long signals during this period. However, the short signal was not profitable and lost investors -4.39%.


WPM has been outperforming the SP500 index in recent time. Over the last 2 years 11 months and 9 days, WPM outperformed the SP500 index on 51% days.

During the last three months WPM delivered losses on 59% days. However, it still managed to end this period in a profit. It's best return during this period (of +4.67%) was on Friday, 16 Nov, 2018. While it's worst loss in the same period (of -4.65%) was on Thursday, 25 Oct, 2018. There was initially a bullish trend during this period which started on 14 Sep, 2018 and went on till 20 Sep, 2018. The bullish trend returned +6.48% to investors. This was followed by a bearish trend that started on 2 Nov, 2018 and ended on 13 Nov, 2018. This bearish trend lost -8.74% of investor capital.

On monthly basis, WPM delivered profits and losses in equal number of months. WPM delivered profits less regularly than SP500 index. WPM was also a more risky investment than SP500 index as it's worst month in the last year, Aug 2018, returned -18.0% compared to -7.28% returned by SP500 index in Oct 2018. WPM had a shorter streak of profitable months than SP500 index. It only went up in 4 straight months during the last year.

Persist - don't take no for an answer. If you're happy to sit at your desk and not take any risk, you'll be sitting at your desk for the next 20 years.
-- David Rubenstein

WPM 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 WPM's volatility from 14 Sep, 2018 to 16 Nov, 2018. While there was a significant surge in the SP500 index's volatility from 14 Sep, 2018 to 29 Oct, 2018.

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

Investors trading in WPM derivatives at this moment can consider 'Long Strangle' options strategy to receive better risk-adjusted returns.

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

Based on your interest in WPM you may find it interesting to know that PRQR has shown remarkable performance this year and deserves to be on every investors' watchlist.

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