Large Cap THEME

1468.5 +4.65 (+0.32%) Sell

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

14 min read

~LARGECAP is a falling knife that can bleed you if you catch it today. On a longer term basis, investors in Large Cap made +0.05% per day. Tuesday's performance of +0.32% was a significant outperformance compared to it's daily average.

[Theme constituents]

Buy-and-Hold investors in ~LARGECAP experienced a maximum drawdown of -12.55% over the last three months. It returned -10.99% 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 +8.29%.


~LARGECAP has been underperforming the SP500 index in recent time, after having outperformed till 11 Oct, 2018. Over the last 2 years 11 months and 14 days, ~LARGECAP outperformed the SP500 index on 61% days.

During the last three months ~LARGECAP was mostly loss making and delivered on average -0.18% per day. It's best return during this period (of +2.61%) was on Wednesday, 28 Nov, 2018. While it's worst loss in the same period (of -3.47%) was on Tuesday, 4 Dec, 2018. There was initially a bullish trend during this period which started on 19 Sep, 2018 and went on till 21 Sep, 2018. The bullish trend returned +1.03% to investors. This was followed by a bearish trend that started on 4 Oct, 2018 and ended on 11 Oct, 2018. This bearish trend lost -5.84% of investor capital.

On monthly basis, ~LARGECAP delivered profits in more months over the last year, than losses. ~LARGECAP delivered profits less regularly than SP500 index. ~LARGECAP was also a less risky investment than SP500 index as it's worst month in the last year, Dec 2018, returned -7.59% compared to -7.75% returned by SP500 index in Dec 2018. ~LARGECAP had a shorter streak of profitable months than SP500 index. It only went up in 3 straight months during the last year. It is interesting to note that both ~LARGECAP and SP500 index significantly outperform during months when quarterly/annual results are announced.

Everyone has the brainpower to follow the stock market. If you made it through fifth-grade math, you can do it.
-- Peter Lynch.

~LARGECAP 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 ~LARGECAP's volatility from 28 Sep, 2018 to 4 Dec, 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 ~LARGECAP has significant positive skewness in it's return distribution. This indicates that investors can expect ~LARGECAP to recover from drawdowns quickly. Which makes ~LARGECAP a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

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

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

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