Water Shortage THEME

984.13 -4.11 (-0.42%) Sell

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

14 min read

Water Shortage was among the worst performers today. It returned -0.42% to close at 984.13. During the last week it returned -4.17% and saw a maximum drawdown of -4.17%.

[Theme constituents]

Buy-and-Hold investors in ~WATERSHORTAGE experienced a maximum drawdown of -12.47% over the last three months. It returned -11.97% 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 +10.53%.


~WATERSHORTAGE has been outperforming the SP500 index in recent time. Over the last 1 year and 2 months, ~WATERSHORTAGE underperformed the SP500 index on 47% days. Which indicates that on days ~WATERSHORTAGE underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

~WATERSHORTAGE returned losses on 56% days in the last three months. During this time, it delivered on average -0.19% per day. It delivered it's best daily return of +3.32%, during this period, on Tuesday, 16 Oct, 2018. There was initially a bullish trend during this period which started on 1 Nov, 2018 and went on till 7 Nov, 2018. The bullish trend returned +9.39% to investors. This was followed by a bearish trend that started on 8 Nov, 2018 and ended on 14 Nov, 2018. This bearish trend lost -5.76% of investor capital.

On monthly basis, ~WATERSHORTAGE delivered profits in more months over the last year, than losses. ~WATERSHORTAGE delivered profits less regularly than SP500 index. ~WATERSHORTAGE was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -10.88% compared to -7.75% returned by SP500 index in Dec 2018. ~WATERSHORTAGE and SP500 index, both had periods of 6 consecutive profitable months.

I think that stocks have been this tremendous, tremendous equalizer for people in this country. Guys who can't make a lot of money at their jobs have been able to make a lot of money in the stock market.
-- Jim Cramer

~WATERSHORTAGE 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 ~WATERSHORTAGE's volatility from 21 Sep, 2018 to 16 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 ~WATERSHORTAGE has significant positive skewness in it's return distribution. This indicates that investors can expect ~WATERSHORTAGE to recover from drawdowns quickly. Which makes ~WATERSHORTAGE a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

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

On a general note (since you are interested in ~WATERSHORTAGE), three mid cap instruments that deserve special mention are LULU, RHT and ABMD. They have all outperformed the market and must be closely watched for investment opportunities.

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