Cosmetics And Personal Care THEME

886.4 +1.1 (+0.12%) Sell

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Are you evaluating investing in COSMETICS THEME? Avoid as it has destroyed investor wealth

13 min read

Cosmetics and Personal Care has destroyed investor wealth on Tuesday. It grew by +0.12% to close at 886.4. It is currently trading -16% below it's 52 week high of 1059.24.

[Theme constituents]

~COSMETICS showed a strong down trend over the last 3 months. During this period ~COSMETICS lost -10.15% and saw a maximum drawdown of -11.28%. There was a short signal during this period which returned +4.52%.


~COSMETICS has been outperforming the SP500 index in recent time. Over the last 2 years and 3 months, ~COSMETICS underperformed the SP500 index on 50% days. Which indicates that on days ~COSMETICS underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months ~COSMETICS delivered profits on 52% days. However, it still managed to end this period in a loss. It's best return during this period (of +3.94%) was on Friday, 9 Nov, 2018. While it's worst loss in the same period (of -3.33%) was on Tuesday, 4 Dec, 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 -3.27% losses to investors. This was followed by a bullish trend that started on 30 Oct, 2018 and ended on 6 Nov, 2018. This bullish trend delivered +6.87% to investors.

~COSMETICS had 5 profitable and 7 loss making months over the last year. During the last year, ~COSMETICS underperformed SP500 index on monthly return basis. ~COSMETICS was also a less risky investment than SP500 index as it's worst month in the last year, Dec 2018, returned -6.52% compared to -7.75% returned by SP500 index in Dec 2018. ~COSMETICS had a shorter streak of profitable months than SP500 index. It only went up in 3 straight months during the last year.

The stock market is a discounter of all known information.
-- Kenneth Fisher

~COSMETICS 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 ~COSMETICS's volatility from 2 Oct, 2018 to 9 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 ~COSMETICS has significant positive skewness in it's return distribution. This indicates that investors can expect ~COSMETICS to recover from drawdowns quickly. Which makes ~COSMETICS a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

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

On a general note (since you are interested in ~COSMETICS), ZBRA is a small cap that deserves to be closely tracked for investment opportunities.

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