Internet THEME

1309.7 +1.68 (+0.13%) Sell

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

14 min read

~INTERNET ranked among the worst performers today. On a longer term basis, investors in Internet made +0.07% per day. Tuesday's performance of +0.13% was a significant outperformance compared to it's daily average.

[Theme constituents]

Buy-and-Hold investors in ~INTERNET experienced a maximum drawdown of -17.47% over the last three months. It returned -13.76% during this strong down trending period. There were no long signals during this period, where the short signal generated good profits of +13.76% for investors.

Trend

~INTERNET has been outperforming the SP500 index in recent time. Over the last 1 year and 10 months, ~INTERNET outperformed the SP500 index on 53% days.

During the last three months ~INTERNET was mostly loss making and delivered on average -0.21% per day. It's best return during this period (of +4.92%) was on Wednesday, 31 Oct, 2018. While it's worst loss in the same period (of -4.98%) was on Wednesday, 24 Oct, 2018. There was initially a bearish trend during this period which started on 4 Oct, 2018 and went on till 11 Oct, 2018. The trend delivered -10.75% losses to investors. This was followed by a bullish trend that started on 30 Oct, 2018 and ended on 1 Nov, 2018. This bullish trend delivered +10.79% to investors.

On monthly basis, ~INTERNET delivered profits in more months over the last year, than losses. ~INTERNET delivered profits less regularly than SP500 index. ~INTERNET significantly outperformed SP500 index in Jan 2018, when it returned +9.15% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. ~INTERNET had a shorter streak of profitable months than SP500 index. It only went up in 3 straight months during the last year.

"Experience taught me a few things. One is to listen to your gut, no matter how good something sounds on paper. The second is that you're generally better off sticking with what you know. And the third is that sometimes your best investments are the ones you don't make.

~INTERNET 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 ~INTERNET's volatility from 27 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 ~INTERNET has significant positive skewness in it's return distribution. This indicates that investors can expect ~INTERNET to recover from drawdowns quickly. Which makes ~INTERNET a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

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

On a general note (since you are interested in ~INTERNET), two instruments that have been extremely volatile in recent times are VIPS and IX. Investors in these instruments should consider reducing their exposure (to VIPS and IX) and diversifying their portfolios.

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