Building Materials THEME

929.938 +10.84 (+1.17%) Sell

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BUILDINGMTRLS THEME is a falling knife, continues to bleed every investor trying to catch it

14 min read

Building Materials has destroyed investor wealth on Tuesday. It grew by +1.17% to close at 929.938. On a day when the overall market breadth was 34%, it closed higher than 16% of the market. In comparison, the benchmark SP500 index closed today at +0.01%.

[Theme constituents]

~BUILDINGMTRLS is currently in a down trend. Over the last three months 2 bearish signals have generated a profit of +18.61% for investors.


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

During the last three months ~BUILDINGMTRLS was mostly loss making and delivered on average -0.38% per day. It's best return during this period (of +4.99%) was on Tuesday, 30 Oct, 2018. While it's worst loss in the same period (of -4.88%) was on Tuesday, 4 Dec, 2018. There was initially a bearish trend during this period which started on 20 Sep, 2018 and went on till 12 Oct, 2018. The trend delivered -14.68% losses to investors. This was followed by a bullish trend that started on 30 Oct, 2018 and ended on 2 Nov, 2018. This bullish trend delivered +11.2% to investors.

~BUILDINGMTRLS had 5 profitable and 7 loss making months over the last year. During the last year, ~BUILDINGMTRLS underperformed SP500 index on monthly return basis. ~BUILDINGMTRLS was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -14.34% compared to -7.75% returned by SP500 index in Dec 2018. ~BUILDINGMTRLS had a longer winning streak of losing months than SP500 index. It went down in 3 straight months (from Aug 2018 to Oct 2018) during which period it delivered -21.34%. It is interesting to note that both ~BUILDINGMTRLS and SP500 index significantly outperform during months when quarterly/annual results are announced.

The stock market is filled with individuals who know the price of everything, but the value of nothing.
-- Philip Arthur Fisher

~BUILDINGMTRLS 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 ~BUILDINGMTRLS's volatility from 20 Sep, 2018 to 1 Nov, 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 ~BUILDINGMTRLS has significant positive skewness in it's return distribution. This indicates that investors can expect ~BUILDINGMTRLS to recover from drawdowns quickly. Which makes ~BUILDINGMTRLS a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

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

On a general note (since you are interested in ~BUILDINGMTRLS), two small cap instruments that deserve special mention are PTC and BURL. They have significantly outperformed the overall market.

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