Forest Products Paper THEME

912.997 -8.99 (-0.98%) Sell

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The party never started for FORESTPRODUCTS THEME investors as it destroyed investor wealth

13 min read

~FORESTPRODUCTS has destroyed investor wealth today. On a longer term basis, investors in Forest Products Paper made 0.0% per day. Tuesday's performance of -0.98% was a significant underperformance compared to it's daily average.

[Theme constituents]

Buy-and-Hold investors in ~FORESTPRODUCTS experienced a maximum drawdown of -30.26% over the last three months. It returned -29.32% 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 +22.53%.


~FORESTPRODUCTS has been underperforming the SP500 index in recent time, after having outperformed till 25 Jan, 2017. Over the last 2 years 11 months and 14 days, ~FORESTPRODUCTS underperformed the SP500 index on 51% days.

During the last three months ~FORESTPRODUCTS was mostly loss making and delivered on average -0.5% per day. It's best return during this period (of +17.65%) was on Friday, 23 Nov, 2018. While it's worst loss in the same period (of -5.6%) 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 1 Oct, 2018. The trend delivered -7.07% losses to investors. This was followed by a bullish trend that started on 30 Oct, 2018 and ended on 5 Nov, 2018. This bullish trend delivered +10.2% to investors.

On monthly basis, ~FORESTPRODUCTS delivered losses in more months over the last year, than profits. ~FORESTPRODUCTS delivered profits less regularly than SP500 index. ~FORESTPRODUCTS significantly outperformed SP500 index in Aug 2018, when it returned +20.36% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. ~FORESTPRODUCTS had a longer winning streak of losing months than SP500 index. It went down in 4 straight months (from Feb 2018 to May 2018) during which period it delivered -21.74%. It is interesting to note that both ~FORESTPRODUCTS and SP500 index significantly outperform during months when quarterly/annual results are announced.

If you do chose to invest in a share, invest for the lifetime.
-- Sandeep Sahajpal

~FORESTPRODUCTS 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 ~FORESTPRODUCTS's volatility from 21 Sep, 2018 to 23 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 ~FORESTPRODUCTS 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 ~FORESTPRODUCTS. Therefore, SP500 must receive a lower allocation than ~FORESTPRODUCTS in your portfolio. SP500 index usually has shorter drawdown period than ~FORESTPRODUCTS.

On a general note (since you are interested in ~FORESTPRODUCTS), three small cap instruments that deserve special mention are ZBRA, AAXN and PTC. They have all outperformed the market and must be closely watched for investment opportunities.

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