The second problem — the preference for highly leveraged stocks — contributes directly to the first problem —
big drawdowns in a downturn because investors tend to vomit up highly leveraged stocks as the market falls.
The portfolio has been hampered by
big drawdowns in a handful of names, which the quantitative rules continue to define as undervalued.
«The reason is we've had
this big drawdown in inventory,» he said.
Not exact matches
In a post last week, I reviewed the biggest drawdowns for the Dow in each of the previous eleven decade
In a post last week, I reviewed the
biggest drawdowns for the Dow
in each of the previous eleven decade
in each of the previous eleven decades.
However, note that
in 2009, the
drawdown of RSP was significantly
bigger, and was enough to bring it down to the level of the standard index.
Hard to know whether that will help: over the five years under its current management, the fund has been a lot more volatile (
bigger maximum
drawdown but much faster recovery) and more profitable than its peers; the question is whether,
in uncertain times, investors will buy that combo — even after the generous cost reduction.
Felix has an awesome performance
in picking the Nasdaq 100, but there are some
big drawdowns.
We can also see it
in the last
big drawdown from 2007 to late 2008 when value fell further than the market, and then recovered faster from early 2009.
Since the Buy - and - Holder takes far
bigger hits
in price crashes (recent academic research shows that the maximum
drawdown number for Buy - and - Holders is 61 percent but that for Buy - and - Holders the number is 21 percent), he is far more likely to sell stocks
in a panic at the worst possible time and to then remain out of stocks after prices hit levels where the likely long - term return is positively mouthwatering.
Although the smaller stocks
in the highest rank indeed show high annualized rewards
in Zacks» back testing system over the past 12.5 years, the maximum
drawdowns are too
big to make these portfolios time - robust
in our terms.