Obama Care THEME

1270.61 -8.1 (-0.64%) Sell

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Doubt in the minds of OBAMACARE THEME investors as it destroyed investor wealth

14 min read

Obama Care was among the worst performers on Tuesday. It fell by -0.64% to close at 1270.61. It is currently trading -13% below it's 52 week high of 1470.98.

[Theme constituents]

Buy-and-Hold investors in ~OBAMACARE experienced a maximum drawdown of -13.62% over the last three months. It fell by -9.72% during this bearish trending period. There were both Long and Short signals during this period, where the short signals were significantly more profitable than the long signals.


~OBAMACARE has been underperforming the SP500 index in recent time. It showed significant outperformance (compared to the SP500 index) from 8 Jan, 2018 to 4 Dec, 2018. Over the last 2 years 11 months and 14 days, ~OBAMACARE outperformed the SP500 index on 52% days.

~OBAMACARE returned losses on 53% days in the last three months. During this time, it delivered on average -0.15% per day. It delivered it's worst daily return of -4.04%, during this period, on Friday, 14 Dec, 2018. The longest stort-term trend during this period was 8 profitable days, which started on 21 Nov, 2018 and went on till 3 Dec, 2018. This bullish trend returned +9.58% to investors.

During the last year ~OBAMACARE had 7 profitable months and 5 loss making months. ~OBAMACARE returned profits in fewer months than SP500 index. ~OBAMACARE was also a more risky investment than SP500 index as it's worst month in the last year, Dec 2018, returned -12.98% compared to -7.75% returned by SP500 index in Dec 2018. ~OBAMACARE had a shorter streak of profitable months than SP500 index. It only went up in 5 straight months during the last year. It is interesting to note that both ~OBAMACARE and SP500 index significantly outperform during months when quarterly/annual results are announced.

Some of the people in finance touch enormous parts of the economy.
-- Stephen A. Schwarzman

~OBAMACARE is currently seeing overall increase in volatility. In comparison, the SP500 index is seeing increase in volatility. During the last three months, there was a significant surge in ~OBAMACARE's volatility from 26 Sep, 2018 to 14 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 ~OBAMACARE has significant positive skewness in it's return distribution. This indicates that investors can expect ~OBAMACARE to recover from drawdowns quickly. Which makes ~OBAMACARE a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

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

Based on your interest in ~OBAMACARE you may find it interesting to know that EW is a mid cap that has shown remarkable performance and deserves to be on every investors' watchlist.

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