Too Big To Fail THEME

1200.83 -11.42 (-0.95%) Sell

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TOOBIGTOFAIL THEME is a falling knife, continues to bleed every investor trying to catch it

14 min read

Too Big To Fail significantly underperformed today. It lost -0.95% to close at 1200.83. It's recent 5 day performance has been -0.87%, -1.04%, -1.65%, +0.78% and -1.15%.

[Theme constituents]

~TOOBIGTOFAIL showed a strong down trend over the last 3 months. During this period ~TOOBIGTOFAIL lost -19.77% and saw a maximum drawdown of -20.75%. There were 2 short signals during this period that returned a cumulative of +18.8% to investors.


~TOOBIGTOFAIL has been underperforming the SP500 index in recent time, after having outperformed till 21 Feb, 2018. Over the last 2 years 11 months and 14 days, ~TOOBIGTOFAIL underperformed the SP500 index on 49% days. Which indicates that on days ~TOOBIGTOFAIL underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

~TOOBIGTOFAIL returned losses on 59% days in the last three months. During this time, it delivered on average -0.34% per day. It delivered it's worst daily return of -4.74%, during this period, on Tuesday, 4 Dec, 2018. There was initially a bearish trend during this period which started on 21 Sep, 2018 and went on till 28 Sep, 2018. The trend delivered -4.87% losses to investors. This was followed by a bullish trend that started on 29 Oct, 2018 and ended on 8 Nov, 2018. This bullish trend delivered +7.83% to investors.

~TOOBIGTOFAIL had 5 profitable and 7 loss making months over the last year. During the last year, ~TOOBIGTOFAIL underperformed SP500 index on monthly return basis. ~TOOBIGTOFAIL was also a more risky investment than SP500 index as it's worst month in the last year, Dec 2018, returned -13.8% compared to -7.75% returned by SP500 index in Dec 2018. ~TOOBIGTOFAIL had a shorter streak of profitable months than SP500 index. It only went up in 2 straight months during the last year. It is interesting to note that both ~TOOBIGTOFAIL and SP500 index significantly outperform during months when quarterly/annual results are announced.

Stock market bubbles don't grow out of thin air. They have a solid basis in reality, but reality as distorted by a misconception.
-- George Soros

~TOOBIGTOFAIL is becoming more volatile overall. In comparison, the SP500 index is seeing a rise in volatility. During the last three months, there was a significant fall in ~TOOBIGTOFAIL's volatility from 19 Sep, 2018 to 2 Oct, 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 ~TOOBIGTOFAIL has significant positive skewness in it's return distribution. This indicates that investors can expect ~TOOBIGTOFAIL to recover from drawdowns quickly. Which makes ~TOOBIGTOFAIL a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

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

On a general note (since you are interested in ~TOOBIGTOFAIL), three large cap instruments that deserve special mention are AMZN, MSFT and PFE. They have all outperformed the market and must be closely watched for investment opportunities.

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