Social Networking THEME

1248.82 -5.83 (-0.47%) Sell

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

14 min read

Social Networking was among the worst performers on Friday. It fell by -0.47% to close at 1248.82. On a day when the overall market breadth was 35%, it closed higher than 77% of the market. In comparison, the benchmark SP500 index closed today at -0.0191%.

[Theme constituents]

Buy-and-Hold investors in ~SOCIALNETWORK experienced a maximum drawdown of -23.26% over the last three months. It fell by -15.37% during this strong bearish trending period. There were no long signals during this period, where the short signal generated good profits of +15.37% for investors.

Trend

~SOCIALNETWORK has been outperforming the SP500 index in recent time. It showed significant outperformance (compared to the SP500 index) from 2 Mar, 2017 to 18 Jun, 2018. Over the last 1 year 9 months and 12 days, ~SOCIALNETWORK outperformed the SP500 index on 53% days.

During the last three months ~SOCIALNETWORK was mostly loss making and delivered on average -0.24% per day. It's best return during this period (of +4.24%) was on Friday, 12 Oct, 2018. While it's worst loss in the same period (of -5.6%) was on Friday, 9 Nov, 2018. The longest stort-term trend during this period was 6 losing days, which started on 4 Oct, 2018 and ended on 11 Oct, 2018. This bearish trend lost -10.18% of investor capital.

During the last year ~SOCIALNETWORK had 5 profitable months and 7 loss making months. ~SOCIALNETWORK returned profits in fewer months than SP500 index. ~SOCIALNETWORK was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -10.12% compared to -7.28% returned by SP500 index in Oct 2018. ~SOCIALNETWORK had a longer winning streak of losing months than SP500 index. It went down in 4 straight months (from Sep 2018 to Dec 2018) during which period it delivered -19.14%.

"Confronted with a challenge to distill the secret of sound investment into three words, we venture the motto, Margin of Safety.

~SOCIALNETWORK is currently seeing overall fall in volatility. In comparison, the SP500 index is seeing increase in volatility. During the last three months, there was a significant fall in ~SOCIALNETWORK's volatility from 17 Sep, 2018 to 27 Sep, 2018. While there was a significant surge in the SP500 index's volatility from 25 Sep, 2018 to 29 Oct, 2018.

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

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

Based on your interest in ~SOCIALNETWORK you may find it interesting to know that FDX has delivered similar performance as ~SOCIALNETWORK and can be considered as an alternative investment candidate (to ~SOCIALNETWORK).

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