WILLIAMS SONOMA INC

53.99 0.0 (0.0%) Sell

Search for alternative investments is on for WSM investors as it underperforms

13 min read

WILLIAMS SONOMA INC delivered lacklustre performance on Friday. It returned 0.0% to close at 53.99. On a day when the overall market breadth was 35%, it closed higher than 66% of the market. In comparison, the benchmark SP500 index closed today at -0.0233%.

[Themes containing WSM]

Buy-and-Hold investors in WSM experienced a maximum drawdown of -26.28% over the last three months. It returned -22.26% during this strong down trending period. There were both Long and Short signals during this period, where the short signals were significantly more profitable than the long signals. The net profit from Short signals was +14.41%.

Trend

WSM has been underperforming the SP500 index in recent time, after having outperformed till 18 Feb, 2016. Over the last 2 years 11 months and 3 days, WSM underperformed the SP500 index on 49% days. Which indicates that on days WSM underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months WSM was mostly loss making and delivered on average -0.37% per day. It's best return during this period (of +5.65%) was on Tuesday, 30 Oct, 2018. While it's worst loss in the same period (of -11.23%) was on Friday, 16 Nov, 2018. There was initially a bearish trend during this period which started on 17 Oct, 2018 and went on till 24 Oct, 2018. The trend delivered -10.73% losses to investors. This was followed by a bullish trend that started on 21 Nov, 2018 and ended on 28 Nov, 2018. This bullish trend delivered +10.68% to investors.

On monthly basis, WSM delivered losses in more months over the last year, than profits. WSM delivered profits less regularly than SP500 index. WSM significantly outperformed SP500 index in Aug 2018, when it returned +20.07% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. WSM had a longer winning streak of losing months than SP500 index. It went down in 4 straight months (from Sep 2018 to Dec 2018) during which period it delivered -24.37%.

In order to succeed, your desire for success should be greater than your fear of failure.
-- Bill Cosby

WSM is becoming more volatile overall. In comparison, the SP500 index is seeing a rise in volatility. During the last three months, there was a significant surge in WSM's volatility from 12 Sep, 2018 to 4 Dec, 2018. While there was a significant surge in the SP500 index's volatility from 10 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that WSM 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 WSM. Therefore, SP500 must receive a lower allocation than WSM in your portfolio. SP500 index usually has shorter drawdown period than WSM.

On a general note (since you are interested in WSM), ECYT has performed really well this year and deserves to be closely tracked for investment opportunities.

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