Auto Manufacturers THEME

910.971 +15.24 (+1.67%) Sell

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Want to invest in AUTOMFRS THEME? Avoid as it has destroyed investor wealth

14 min read

Auto Manufacturers has destroyed investor wealth on Tuesday. It gained +1.67% to close at 910.971. It is currently trading -31% below it's 52 week high of 1328.4.

[Theme constituents]

~AUTOMFRS showed a strong down trend over the last 3 months. During this period ~AUTOMFRS returned -19.23% and saw a maximum drawdown of -21.41%. There was a short signal during this period which returned +19.23%.


~AUTOMFRS has been outperforming the SP500 index in recent time. Over the last 1 year and 11 months, ~AUTOMFRS underperformed the SP500 index on 49% days. Which indicates that on days ~AUTOMFRS underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

~AUTOMFRS returned losses on 64% days in the last three months. During this time, it delivered on average -0.33% per day. It delivered it's worst daily return of -4.42%, during this period, on Wednesday, 24 Oct, 2018. There was initially a bearish trend during this period which started on 2 Oct, 2018 and went on till 12 Oct, 2018. The trend delivered -11.89% losses to investors. This was followed by a bullish trend that started on 25 Oct, 2018 and ended on 1 Nov, 2018. This bullish trend delivered +9.97% to investors.

On monthly basis, ~AUTOMFRS delivered losses in more months over the last year, than profits. ~AUTOMFRS delivered profits less regularly than SP500 index. ~AUTOMFRS was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -10.54% compared to -7.75% returned by SP500 index in Dec 2018. ~AUTOMFRS had a longer winning streak of losing months than SP500 index. It went down in 6 straight months (from May 2018 to Oct 2018) during which period it delivered -17.52%. It is interesting to note that both ~AUTOMFRS and SP500 index significantly outperform during months when quarterly/annual results are announced.

If we command our wealth, we shall be rich and free. If our wealth commands us, we are poor indeed.
-- Edmund Burke

~AUTOMFRS 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 ~AUTOMFRS's volatility from 3 Oct, 2018 to 25 Oct, 2018. While there was a significant surge in the SP500 index's volatility from 19 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that ~AUTOMFRS has significant positive skewness in it's return distribution. This indicates that investors can expect ~AUTOMFRS to recover from drawdowns quickly. Which makes ~AUTOMFRS a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

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

On a general note (since you are interested in ~AUTOMFRS), two large cap instruments that deserve special mention are PFE and AMZN. They have significantly outperformed the overall market.

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