Machinery Diversified THEME

1007.56 +7.66 (+0.76%) Sell

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The party never started for MACHINERYDIV THEME investors as it was among the worst performers

14 min read

Machinery Diversified was among the worst performers today. It grew by +0.76% to close at 1007.56. During the last week it returned -4.04% and saw a maximum drawdown of -4.76% before bouncing back.

[Theme constituents]

Buy-and-Hold investors in ~MACHINERYDIV experienced a maximum drawdown of -22.83% over the last three months. It returned -21.58% 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 +16.32%.


~MACHINERYDIV has been underperforming the SP500 index in recent time, after having outperformed till 21 Mar, 2018. Over the last 1 year 7 months and 6 days, ~MACHINERYDIV underperformed the SP500 index on 46% days. Which indicates that on days ~MACHINERYDIV underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months ~MACHINERYDIV was mostly loss making and delivered on average -0.37% per day. It's best return during this period (of +2.92%) was on Wednesday, 28 Nov, 2018. While it's worst loss in the same period (of -5.21%) was on Tuesday, 4 Dec, 2018. There was initially a bearish trend during this period which started on 4 Oct, 2018 and went on till 12 Oct, 2018. The trend delivered -10.33% 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 +5.38% to investors.

On monthly basis, ~MACHINERYDIV delivered profits and losses in equal number of months. ~MACHINERYDIV delivered profits less regularly than SP500 index. ~MACHINERYDIV was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -13.14% compared to -7.75% returned by SP500 index in Dec 2018. ~MACHINERYDIV 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 ~MACHINERYDIV and SP500 index significantly outperform during months when quarterly/annual results are announced.

"Hats have been my thing pretty much my whole life but finance has not. I would go to the corner store and buy really cheap baseball style caps and wear those to school.

~MACHINERYDIV 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 ~MACHINERYDIV's volatility from 19 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 ~MACHINERYDIV has significant positive skewness in it's return distribution. This indicates that investors can expect ~MACHINERYDIV to recover from drawdowns quickly. Which makes ~MACHINERYDIV a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

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

On a general note (since you are interested in ~MACHINERYDIV), two instruments that have delivered similar performance as ~MACHINERYDIV are GPMT and FG. They are suitable as good alternative investment candidates that can diversify your portfolio.

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