Broken Pie Chart

Derek Moore and Jay Pestrichelli, CEO of ZEGA Financial look at some what seem like crazy options trades in GameStop. Plus, examining Nvidia passing Apple as the second largest stock in the S&P 500, and can it pass Microsoft for #1? They also talk about whether it's a problem the top 4 stocks in the S&P 500 make up such a large percentage of the weighting and comparing it to the last time it was this high. Later they take some listener questions including whether the data shows cracks in the regional banks due to mortgage delinquencies, what happened in the unemployment report, and more. Unemployment reaches 4% Top 4 companies in the S&P 500 Index highest since the 1960's Comparing the contribution to returns S&P 500 Index top 496 vs the top 3 and Nvidia Residential mortgage delinquencies and effect on regional banks FDIC quarterly data on the health of banks Nvidia passes Apple for #2 as its market cap exceeds Apples but will Microsoft be next? 1964 vs 2024 top 4 company weighting in the S&P 500 Index Now the top 4 companies today are a lot more diverse business GameStop options trading Looking at the 128 calls open interest, volume and probabilities next 2 weekly expirations Volatility in the GameStop option chain Mentioned in this Episode Mortgage Bankers Association data on residential mortgage delinquencies https://usreop.com/mba-chart-of-the-week-seriously-delinquent-rates-by-loan-type-conventional-fha-va-may-17-2024/ Delinquency rates on commercial real estate loans from FRED https://fred.stlouisfed.org/series/DRCRELEXFACBS CNBC piece on potential cracks in the banking system https://www.cnbc.com/2024/03/19/where-cracks-in-the-banking-sector-may-appear-without-more-ma.html Crazy VIX Bets Due to Election? | Market Reversal | Home Ownership Affordability Today | Shiller PE https://podcasts.apple.com/us/podcast/crazy-vix-bets-due-to-election-market-reversal-home/id1432836154?i=1000657610266 Derek Moore's book Broken Pie Chart https://amzn.to/3S8ADNT Jay Pestrichelli's book Buy and Hedge https://amzn.to/3jQYgMt Derek's new book on public speaking Effortless Public Speaking https://amzn.to/3hL1Mag Contact Derek [email protected] www.zegafinancial.com

Derek Moore and Jay Pestrichelli, CEO of ZEGA Financial review some interesting VIX option trades around the election and around inauguration day in 2025 compared to the next few months options action. When young people say home ownership dreams are dead is that true? Surprising numbers to compare inflation adjusted costs. Plus, on Friday the market swung from down over 1% to up almost 1% as we continue to be in a buy the dip regime. Later discussing the evolving Fed rate cut expectations and why it shouldn't be a surprise. Finally, they go bring up container shipping costs rising again and what that means for inflation, the Presidential election market cycle, history of interest rates, and more. Looking at VIX trades far out of the money around election and inauguration day Are retail investors making bets on a rise in volatility due to the election? Why trading VIX options can be frustrating and may be misused by retail traders Home ownership dreams dead for young people? Comparing a monthly mortgage payment today on an inflation adjusted basis to historical Home prices compared on an inflation adjusted basis History of interest rates over 5000 years Container shipping costs on the rise Share buybacks at highest level over the last couple years and what that means for earnings Friday's huge market reversal going from down to up in the last hour Fed rate cut expectations through the end of 2024 down from 7 cuts to 1 cut 4th year of the Presidential cycle and the S&P 500 Index What Shiller Cape ratio means for returns over the next 10 years Cape PE ration and Price to Free Cash Flow Mentioned in this Episode History of Interest Rates book by Sidney Homer and Richard Sylla https://amzn.to/3V3TNEJ Derek Moore's book Broken Pie Chart https://amzn.to/3S8ADNT Jay Pestrichelli's book Buy and Hedge https://amzn.to/3jQYgMt Derek's new book on public speaking Effortless Public Speaking https://amzn.to/3hL1Mag Contact Derek [email protected] www.zegafinancial.com

Derek Moore and Jay Pestrichelli, CEO of ZEGA Financial talk about Nvidia's earnings report and how they are catching up to Apple in total market cap. Will they cash Microsoft? Then they note the percentage of companies mentioning AI on earnings calls. What does that mean for CAPEX spending on semiconductor chips? Later they look at how housing prices after a small drop are now growing YoY despite higher interest rates and higher payment per median home price. The gold rally now one is noticing in 2024. A little Japan 10-year bond talk as rates hit 1%. Finally, Jay and Derek talk about how rates are staying higher for longer and the market might need to get over it while the "threat" of lowering rates might help markets. Earnings mentions of AI on earnings conference calls surge Nvidia is catching up to Apple in market cap What is market cap and how to compute it? Surprising market cap size for one semiconductor company. Comparing S&P 500 Index market return paths since 1990 Is 2024 the new 1995 for S&P 500 returns? Nvidia stock price growth vs income and revenue growth last 10 years Now investors don't thing there is a chance for a recession Investor sentiment or likelihood of recession being high might be contrarian indicator University of Michigan inflation expectations over next 5 years surges Historical asset class by year returns Gold still rallying but does anyone care? One family home sales median price year over year price change growth Charting monthly mortgage payment on purchasing a median priced home Japanese 10 year bonds hit 1% Why investing for longer means your win probability gets really high Mentioned in this Episode Roaring Kitty Tweets and Gamestop rises and falls https://open.spotify.com/episode/5PtbYzdRunB7UPJRWQaXYK?si=OkMXUjOnQRGaJ2OZY-y8YQ Derek Moore's book Broken Pie Chart https://amzn.to/3S8ADNT Jay Pestrichelli's book Buy and Hedge https://amzn.to/3jQYgMt Derek's new book on public speaking Effortless Public Speaking https://amzn.to/3hL1Mag Contact Derek [email protected] www.zegafinancial.com

Derek Moore and Jay Pestrichelli, CEO of ZEGA Financial start by looking at GameStop's (GME) call option open interest and activity in the days prior to Roaring Kitty tweeting . They notice the increase in options activity ahead of the surge in the stock's price and volume spike and whether the options market led the stock market on GME. Then they comment on another new all-time high by the S&P 500 Index and how according to a BofA chart 90% of the time markets are not in a recession or in stagflation since 1948. Later Derek and Jay bring up the CPI Supercore trending higher while car insurance rates are soaring. What does this mean for the Fed and rates? Finally explanation of when covered calls get called away early. Roaring Kitty comes out of hibernation to tweet. Looking at GameStop options activity prior to Roaring Kitty's tweet Did the options activity prior to the stock activity mean people knew the tweet was coming? Are we in for a GameStop meme stock part 2? Why retail investors should use caution in trading GameStop. Looking at the implied volatility on GameStop options to understand expected volatility. CPI Supercore continues to rise YoY and what that means for interest rates and the Fed Car insurance rates are surging 20%+ and rising How long it takes the S&P 500 to go up each 100 point increment According to a Bank of America graph 90% of the time since 1948 no recessions or stagflation Enough about the Fed and rates? When do covered calls get called away early and assigned? Understanding dividends vs time value in deciding when covered calls get assigned Early assignment for options What implied volatility says about what the options market expects a stock to move GameStop 300% implied volatility is massive and how expensive the ATM straddle is Mentioned in this Episode PPI comes in hotter than expected click below to read the PPI report release https://www.bls.gov/news.release/ppi.nr0.htm Derek Moore's book Broken Pie Chart https://amzn.to/3S8ADNT Jay Pestrichelli's book Buy and Hedge https://amzn.to/3jQYgMt Derek's new book on public speaking Effortless Public Speaking https://amzn.to/3hL1Mag Contact Derek [email protected] www.zegafinancial.com

Derek Moore and Jay Pestrichelli, CEO of ZEGA Financial discuss the idea that the stock market is in a Goldilocks period based on sustained higher margins and earnings growth. Then, they discuss how out of the headlines the Fed has already started easing by reducing their balance sheet runoff each month. Why reducing the Overnight Reverse Repo usage (RRP) isn't restrictive but rather was a reaction to demand for short term treasuries by money markets. Later they talk about how interest rates are below long run averages despite what everyone tells you on CNBC and why high rates may not be a problem. Finally, they look at corporate earnings and profit margins for the S&P 500 Index and how they've growth over the years, gold prices vs oil prices as a predictive model, and yes some shipping container inflationary commentary. Growth in S&P 500 earnings per share analyst projections How net profit margins for the S&P 500 Index companies has growth over the years Why this might be a hated bull market despite some goldilocks market aspects What could derail this market? Why profit margins continue to be higher and why they do or don't have to revert to the mean The Fed balance sheet explained How the Fed is going to be reducing the amount of bonds running off the balance sheet. How the Fed is restrictive and easing at the same time Explaining what the Overnight Reverse Repo Market (RRP) is Why the Fed reducing the balance of Overnight Reverse Repos isn't restrictive policy The order of how the Fed may ease (hint, it may not start with interest rates) The 1990s bull run with higher interest rates and lower profit margins Maersk container shipping operating hints at higher costs due to capacity, fuel, and congestion What does higher container shipping costs mean for inflation and prices? Do Gold prices project out what oil prices will do in the next 19 months? Explaining the cost of hedging and how it is very cheap to put on downside hedges right now The cost of a 1 year 10% out of the money put option The cost of a 1 year ATM at-the-money put option Using low or no cost collars to hedge the downside Using long put spreads to hedge or buffer the downside Mentioned in this Episode Explaining High Dividend ETFs and Stocks and How Reinvesting Dividends Works to Build Share Count and Compound Returns https://podcasts.apple.com/us/podcast/reinvesting-high-dividends-deep-dive-unemployment-the/id1432836154?i=1000654585450 Derek Moore's book Broken Pie Chart https://amzn.to/3S8ADNT Jay Pestrichelli's book Buy and Hedge https://amzn.to/3jQYgMt Derek's new book on public speaking Effortless Public Speaking https://amzn.to/3hL1Mag Contact Derek [email protected] www.zegafinancial.com

Derek Moore is back with Jay Pestrichelli, CEO of ZEGA Financial this week to discuss the Jay Powell Fed decision and the latest in employment and inflation. Then, they do a deep dive into dividend reinvestment. Specifically, analyzing the idea of acquiring more shares and can dividends reduce or eventually pay down your initial cost? They then do a deep dive into how the time premium works on options. Lowest year over year wages since 2021 Unemployment ticks up. High dividend stocks and dividend reinvestment deep dive Acquiring more shares through dividend reinvestment Compounding dividends through dividend reinvestment and increasing share count. What is shareholder yield? What is buyback yield vs dividend yield? Fed higher for longer is now consensus. What is time value of an option Looking at option premium and time value through the market maker lens Exploring the SPX 6000 Call option expiring Dec 31st, 2024, premium and time value How options are priced How market makers taking the other side of customer orders have to hedge their positions Components of unemployment report labor force size vs employed and unemployed Selling option premium to create high dividends Mentioned in this Episode Is it 1994 All Over Again? https://podcasts.apple.com/us/podcast/1994-95-all-over-again-in-markets/id1432836154?i=1000590865306 Now Its 1 Fed Rate Cut? | Nvidia Options Volatility Implied Move at Earnings | Sell in May and Go Away in Election Years? | Inflation Higher Than 1970s? https://podcasts.apple.com/us/podcast/now-its-1-fed-rate-cut-nvidia-options-volatility-implied/id1432836154?i=1000653836218 Derek Moore's book Broken Pie Chart https://amzn.to/3S8ADNT Jay Pestrichelli's book Buy and Hedge https://amzn.to/3jQYgMt Derek's new book on public speaking Effortless Public Speaking https://amzn.to/3hL1Mag Contact Derek [email protected] www.zegafinancial.com

Derek Moore discusses the declining probabilities for Fed interest rate cuts in 2024. Plus, how PCE Supercore did not make the case for Fed rate cuts. Later, looking at the analyst's expectations for earnings growth within the S&P 500 Index. Finally, comments on a paper showing how using the pre-1983 methods to compute CPI Consumer Price Index show we had higher inflation that the 1970s. Declining Fed Funds rate cut probabilities for 2024. Explaining how implied interest rates from Fed Funds futures are computed. The case against rate cuts seems to be buoyed by sticky US CPI Supercore measures. What is CPI Supercore and PCE Supercore compared to CPI Core and plain old CPI? Explaining how the US CPI Consumer Price Index used to compute inflation prior to 1983. How measuring housing inflation changed in 1983. Why did they change how CPI is measured to owners' equivalent rent? Looking at the probabilities for rate cuts across different Fed FOMC meeting dates What about Sell in May and Go Away in election years? Explaining how to tell what the options market is implying for a 1-standard deviation move Implied volatility around Nvidia earnings date scheduled for May 22nd How to calculate the implied move in a stock based on the options market Examining the at the money ATM straddle on Nvidia options expiring 2 days after earnings Mentioned in this Episode Is it 1994 All Over Again? https://podcasts.apple.com/us/podcast/1994-95-all-over-again-in-markets/id1432836154?i=1000590865306 Podcast: Explaining How and Why Bonds Make or Lose Money https://open.spotify.com/episode/3AUT2DVbHfEQyJglpe70nP?si=wIFug8IfR1-sb_bX03qNHA Previous Week's Podcast: Market Correction | Mortgage Rates Higher | No Thanks 24-Hour Trading | Synthetic Options https://podcasts.apple.com/us/podcast/market-correction-mortgage-rates-higher-no-thanks-24/id1432836154?i=1000653114012 Jay Pestrichelli's book Buy and Hedge https://amzn.to/3jQYgMt Derek's new book on public speaking Effortless Public Speaking https://amzn.to/3hL1Mag Derek Moore's book Broken Pie Chart https://amzn.to/3S8ADNT Contact Derek [email protected] www.zegafinancial.com

Derek Moore and Mike Puck from ZEGA Financial discuss Friday's selloff. It's official, we are in a 5% market correction. Looking back at other corrections greater than 5% from the highs. Mortgage rates move back up while 10-year treasury yields surge. Commodities are higher on the year but still down from all-time highs. Gold makes another all time high. Later they look at the value vs growth performance including the magnificent 7 stocks compared to the rest of the market. Finally, stocks and bonds are more correlated than people realize in higher inflation regimes. Futures selloff overnight and why we don't need 24-hour trading in the stock market Market corrections of over 5% 30-year mortgage rates are spiking again Looking at the high yield bond market with spreads widening 10-year treasury bonds on the way to 5%? Gold makes another all-time high Stock and bond correlations historical look Will bonds still be a good hedge against stocks? Value vs Growth check in Magnificent 7 vs the rest of the S&P 500 Index Synthetic option positions Listener question about knowing what positions make up what strategies Duration of High Yield Bond Index vs time to maturity and Yield to Worst Container shipping rates Check in on where commodity prices are Mentioned in this Episode Podcast: Explaining How and Why Bonds Make or Lose Money https://open.spotify.com/episode/3AUT2DVbHfEQyJglpe70nP?si=wIFug8IfR1-sb_bX03qNHA Previous Week's Podcast: Market Selloff | No Rate Cuts? | Bitcoin vs Gold | CPI Inflation Sticky | VIX Curve https://podcasts.apple.com/us/podcast/market-selloff-no-rate-cuts-bitcoin-vs-gold-cpi-inflation/id1432836154?i=1000652413865 Jay Pestrichelli's book Buy and Hedge https://amzn.to/3jQYgMt Derek's new book on public speaking Effortless Public Speaking https://amzn.to/3hL1Mag Derek Moore's book Broken Pie Chart https://amzn.to/3S8ADNT Contact Derek [email protected] www.zegafinancial.com

Derek Moore and Jay Pestrichelli, CEO of ZEGA Financial, discuss Friday's selloff. So, was it all the readjustment of Fed rate cut expectations? Is CPI Inflation putting the Fed in a box? Michael Saylor says Bitcoin is better than Gold. The rally in Gold that everyone is sleeping on. CPI Supercore trending higher showing services not goods are the culprit. Later they examine the VIX Futures curve as the front months rise. Finally, they talk about the continued bear market due to higher rates on 10-to-30-year US Treasuries from the March 2020 all-time highs against the stock market and high yield. Michael Saylor Bitcoin vs Gold Market selloff reasons High Yield bonds vs equities CPI Supercore trending higher lately. CPI Core vs CPI year over year VIX futures curve and explaining difficulty in picking how to play expected rise in volatility US 30-Year Treasuries made all-time high in March of 2020 but down -44% since What would it take for bond holders to get to break even? Stealth rally in Gold and comparing buying physical gold to gold ETFs GLD and GLDM Comparing inflation outlook between Democrats, Republics, and Independents Earnings season arrives while banks reported but talked NIM net interest margins suffering Mentioned in this Episode Podcast: Explaining How and Why Bonds Make or Lose Money https://open.spotify.com/episode/3AUT2DVbHfEQyJglpe70nP?si=wIFug8IfR1-sb_bX03qNHA Previous Week's Podcast: Buying At All-time Highs Better? | S&P 500 Returns After Last Hike | Developed International Beats the S&P | How To Tell Whether Options Are Expensive https://podcasts.apple.com/us/podcast/buying-at-all-time-highs-better-s-p-500-returns-after/id1432836154?i=1000651729073 Jay Pestrichelli's book Buy and Hedge https://amzn.to/3jQYgMt Derek's new book on public speaking Effortless Public Speaking https://amzn.to/3hL1Mag Derek Moore's book Broken Pie Chart https://amzn.to/3S8ADNT Contact Derek [email protected] www.zegafinancial.com

Derek Moore and Jay Pestrichelli, CEO of ZEGA Financial, are back to explore surprising data about buying the market at all-time highs vs any other day. Plus, how do markets and bonds perform post the last fed hike? Later, while you were sleeping developed international markets outperform U.S. markets. And listener question "who do I know what a good price for an option is?" What is a high or low price for an option? Components that make up and drive option prices Market performance post last fed rate hike Bond market performance after last fed rate hike MSCI EAFE developed markets international outperforms U.S. large cap Why people aren't buying the inflation is lower narrative S&P 500 earnings estimates continue to rise Forward PE multiple on the S&P 500 dynamic Unemployment drops as more people are working and in the labor force How does immigration if at all impact employment data? How far $100 gets you at the grocery store today vs 2019 Understanding the cumulative effects of inflation vs the year over year percent change Why high prices aren't going back down as only the rate of future change adjusts Mentioned in this Episode How far does $100 get you at the grocery store post inflation? https://www.wsj.com/business/retail/inflation-food-price-of-groceries-2024-5010700b?mod=hp_lead_pos7 Previous Week's Podcast: Most Record Highs Since 2013 | The Fed No Rush to Cut? | VVIX and VIX Super Quiet | Value vs Growth | Cocoa More Valuable than Gold? https://podcasts.apple.com/us/podcast/most-record-highs-since-2013-the-fed-no-rush-to-cut/id1432836154?i=1000651003743 Jay Pestrichelli's book Buy and Hedge https://amzn.to/3jQYgMt Derek's new book on public speaking Effortless Public Speaking https://amzn.to/3hL1Mag Derek Moore's book Broken Pie Chart https://amzn.to/3S8ADNT Contact Derek [email protected] www.zegafinancial.com

Derek Moore and Jay Pestrichelli, CEO of ZEGA Financial, discuss Fed governor Waller (not Christopher Walkin) hinting the Fed should be in no rush to cut interest rates. Plus, we haven't seen this many record stock market highs since Q1 of 2013. So, what does that mean if anything? Examining VVIX and VIX which both are really quiet and low right now. Growth has outperformed value by quite a bit, but do some relative value charts hint value may have its time in the sun? Later, corporate profit margins continue to be strong despite many saying they must revert to the mean. Finally, no Cocoa is not worth more than gold per ounce despite what the internet says. Fed Governor Waller says no so fast on the need to cut rates Why would the Fed cut rates if the economy is doing well? Most record stock market highs since Q1 2013 in Q1 of 2024 Corporate profit margins remain strong The VVIX has been sitting below the 80 level VIX index not showing signs of worry Triple top in the Growth relative to Value chart? Cocoa futures make another new high Value of Cocoa futures vs Gold futures Public service (PSA) difference between price return and dividend adjusted return in ETFs Mentioned in this Episode Why cocoa prices spiked and what it means for chocolate lovers from Bloomberg https://www.bloomberg.com/news/articles/2024-03-31/why-cocoa-prices-spiked-and-what-it-means-for-chocolate-lovers Previous Week's Podcast: The Fed Gets Bullish? | Markets Don't Go Down Just Because They Go Up | Yield Curve Inversion Record | Bitcoin Halving https://podcasts.apple.com/us/podcast/the-fed-gets-bullish-markets-dont-go-down-just/id1432836154?i=1000650266452 Jay Pestrichelli's book Buy and Hedge https://amzn.to/3jQYgMt Derek's new book on public speaking Effortless Public Speaking https://amzn.to/3hL1Mag Derek Moore's book Broken Pie Chart https://amzn.to/3S8ADNT Contact Derek [email protected] www.zegafinancial.com

Derek Moore and Jay Pestrichelli, CEO of ZEGA Financial, discuss the Fed getting bullish by reducing unemployment estimates, raising GDP growth estimates, and doing nothing else but the market liked it. All while the yield curve inversion sets a record for longest in history. What is Bitcoin halving and what does it do for supply and demand? Looking at the stock market after going up a lot, why historically it can continue going (or not) up. Looking at 1995-1999 post Fed cut bullish moves. Why media explanations of 2 or 3 interest rate cuts by the Fed based on the median interest rate aren't entirely true. Tip, how to calculate the median of something. All that and plenty more this week! What is Bitcoin halving? How to calculate the median of Fed funds dot plot rate What is the Fed dot plot Fed GDP growth rate upped at the March meeting while unemployment rate lowered Core PCE inflation year end estimate increased by the Fed Is the Fed just going to let inflation run a little hotter? 1995-1999 super strong S&P 500 market returns New Yield Curve inversion record High Yield debt maturity wall pushed out further High Yield debt can be reduced by paying off, rolling, bankruptcy, or become investment grade Looking at times when the market was up double digits over 30 days and what happens next Mentioned in this Episode What is Bitcoin 'Halving' and Does it Push Up the Cryptocurrency's Price? https://www.bloomberg.com/news/articles/2024-03-06/what-is-bitcoin-halving-and-does-it-push-up-the-cryptocurrency-s-price Previous Week's Podcast: Michael Saylor is Right on Bitcoin? |Worst Crash Since 1929 Coming? | Semiconductors Get Big Flows | 0 DTE Option Stats https://podcasts.apple.com/us/podcast/michael-saylor-is-right-on-bitcoin-worst-crash-since/id1432836154?i=1000649479605 Jay Pestrichelli's book Buy and Hedge https://amzn.to/3jQYgMt Derek's new book on public speaking Effortless Public Speaking https://amzn.to/3hL1Mag Derek Moore's book Broken Pie Chart https://amzn.to/3S8ADNT Contact Derek [email protected] www.zegafinancial.com

Derek Moore and Jay Pestrichelli, CEO of ZEGA Financial, talk through some examples of options trading in 0 DTE options on the SPX and Nvidia. Plus, a hedge fund manager says the worst crash since 1929 is coming. Looking at huge inflows into the semiconductor ETFs. Derek actually agrees with Michael Saylor's points on Bitcoin including whether it's a currency or property. Media mentions of stock market bubble are rising but so are continued mentions of AI. Finally, PPI producer price index comes in hot especially services while real retail sales still hasn't gone above its 2022 highs. All that and more this week. Is Bitcoin a currency or property? MicroStrategy's Michael Saylor interview on CNBC Hedge fund manager says worst market crash since 1929 coming How the same people make the same market predictions all the time Semiconductor ETFs get massive flows of money last week Examining detailed option data on SPX and NVDA 0 DTE options Media mentions of "stock market bubble" are rising Media mentions of AI and artificial intelligence jumped prior to the takeoff in AI stocks PPI producer price index comes in hotter than expected Services inflation now higher than goods inflation Comparing US Deposits at commercial banks vs money markets Money markets assets hit new highs What do big money market balances mean for the stock market if anything? Advanced real (after inflation) retail and restaurant sales YTD 2024 ETF category flows bitcoin vs gold Mentioned in this Episode Michael Saylor CNBC interview about Bitcoin and whether it's a currency or property https://twitter.com/saylor/status/1767178599390458285 Previous Week's Podcast: Worst Market Timing Ever? | Options Cost of Carry | Option Put Call Parity | Unemployment Bad News Is Bad News? https://podcasts.apple.com/us/podcast/worst-market-timing-ever-options-cost-of-carry/id1432836154?i=1000648820557 Jay Pestrichelli's book Buy and Hedge https://amzn.to/3jQYgMt Derek's new book on public speaking Effortless Public Speaking https://amzn.to/3hL1Mag Derek Moore's book Broken Pie Chart https://amzn.to/3S8ADNT Contact Derek [email protected] www.zegafinancial.com

Derek Moore and Jay Pestrichelli, CEO of ZEGA Financial, discuss how the magnificent 7 stocks aren't all going up this year. Plus, reviewing what the worst time to buy stocks was and how investors would have done even if they had. Later, they explain why the last 10-15 years before retirement need growth but hedging. How Japan's central bank might take interest rates from negative to positive, shipping container rates, inflation, Nvidia probabilities and the 15th anniversary of CNBC's "Mark Haines Bottom" 3/10/2009. What is the cost of carry for options What is put call parity Option market probabilities What if you bought stocks at the worst time twice? Drawdowns since March of 2000 and October of 2007 15 years since the Mark Haines bottom on CNBC 2009 Comparing stock market drawdowns 2000-2002, 2007-2009, 2018, 2022 Time in the market not timing the market Japan interest rate probabilities What may happen if and when Japan raises interest rates? Japan's currency with a rise in interest rates and implications for US Dollar and Treasuries Magnificent 7 stocks Tesla, Apple, and Google to name a few are down for the year Nvidia and Eli Lilly keeping the S&P 500 Index up Shipping container rates ease but still high, will we see that filter through CPI Inflation data? Explaining the unemployment report Mentioned in this Episode 15 year anniversary of the Mark Haines Bottom March 10th 2009 https://twitter.com/carlquintanilla/status/1766138788881826035 Previous Week's Podcast: Why VIX Is Hard to Trade | SuperCore PCE High Again?| High Yield Bond Spreads | The Fed Is Not Cutting? | Semiconductors Surging (Again) https://podcasts.apple.com/us/podcast/why-vix-is-hard-to-trade-supercore-pce-high-again-high/id1432836154?i=1000647836923 Jay Pestrichelli's book Buy and Hedge https://amzn.to/3jQYgMt Derek's new book on public speaking Effortless Public Speaking https://amzn.to/3hL1Mag Derek Moore's book Broken Pie Chart https://amzn.to/3S8ADNT Contact Derek [email protected] www.zegafinancial.com

Derek Moore and Jay Pestrichelli, CEO of ZEGA Financial, explain why it's so hard to trade the VIX via options or VIX futures given the nature of the products and how VIX works. Supercore PCE, yeah that's a thing now, came in hot so what does that mean for the Fed and rates? Speaking of the Fed cutting rates, what if they don't cut this year? Later they explore how High Yield Bonds aren't showing any fear and comparing the High Yield spread, the long term annualized total return of the High Yield Bond Index, and how CCC Junk Bonds once were yielding a few years ago what short duration Treasury Bills are yielding now. Oh, and let's not forget to look at the SOX Semiconductor Index which just surged again to new highs. What is PCE Supercore compared to CPI? PCE Supercore comes in higher than expected. What if the Fed doesn't cut interest rates and why they would or wouldn't cut this year? What is the VIX Index Explaining VIX Futures and VIX Options Why its so hard to play the VIX using futures or options? The VIX Futures curve What the VIX Futures around the election are showing What is the high yield spread? Annualized returns for the High Yield Index since 1997 Examining times when high yield spreads spiked CCC rated bonds yield to worst What is a Yield to Worst for bonds? SOX Semiconductor Index and future projected earnings growth Remember when Cisco was thought to be the picks and shovels of the internet? Has Cisco ever eclipsed its 2000 dotcom era highs? Super Micro Computer joins the S&P 500 Index replacing Whirlpool Comparing Super Micro Computer's revenues vs Whirlpool's Largest companies by market cap in each decade Mentioned in this Episode: Super Micro Computer joins the S&P 500 Index https://www.cnbc.com/2024/03/01/super-micro-joining-sp-500-after-20-fold-jump-in-stock-in-two-years.html#:~:text=Super%20Micro%20Computer%20is%20joining,in%20extended%20trading%20on%20Friday. Previous Week's Podcast: Nvidia To the Moon | Implied Volatility and Earnings | Earnings and Markets Have Low Correlations? | Nvidia Cheap? https://podcasts.apple.com/us/podcast/nvidia-to-the-moon-implied-volatility-and/id1432836154?i=1000646788686 Jay Pestrichelli's book Buy and Hedge https://amzn.to/3jQYgMt Derek's new book on public speaking Effortless Public Speaking https://amzn.to/3hL1Mag Derek Moore's book Broken Pie Chart https://amzn.to/3S8ADNT Contact Derek [email protected] www.zegafinancial.com

Derek Moore and Jay Pestrichelli, CEO of ZEGA Financial, discuss Nvidia's beat on earnings, their march towards $2trillion market cap, and how as earnings forecasts rise, even though the stock has made new highs, forward PE ratios go lower. Then, they explore what the options market via implied volatility was forecasting for an Nvidia move post earnings. Later, they review a comparison between the S&P 500 Index annual return vs the EPS growth to see if there is any relationship. Hint, it's not too correlated even when they compare the current year market performance against the 1 year forward actual earnings. All that and more will be explained including some recommendations. Nvida's stock is rising while its forward PE just got cheaper Nvidia's recent earnings beat including EPS growth, revenue growth, and gross and net margins What would it take for Nvida to overtake Microsoft as the largest company in the S&P 500? Implied move post earnings based on the implied volatility of the options market Price of the at the money long straddle on Nvidia the afternoon of earnings Regression analysis of S&P 500 Index annual return vs EPS growth Correlations between market returns and earnings growth Comparing correlations with same year market returns vs same year and 1 year forward EPS Markets are forward looking Probability of Nvidia reaching $3.06T in market cap in one year per options market Mentioned in this Episode: Where returns come from see start of page 23 in Semper Augustus group letter https://static.fmgsuite.com/media/documents/db64b928-53d6-43a9-a4d0-a9d2f69f76ba.pdf Previous Week's Podcast: Put & Call Implied Volatility Mismatch? | US Dollar vs S&P 500 Correlation | Sticky Inflation | Japan Recession | Explaining Why Stocks Go Up (or down)https://podcasts.apple.com/us/podcast/put-call-implied-volatility-mismatch-us-dollar-vs-s/id1432836154?i=1000645873203 Jay Pestrichelli's book Buy and Hedge https://amzn.to/3jQYgMt Derek's new book on public speaking Effortless Public Speaking https://amzn.to/3hL1Mag Derek Moore's book Broken Pie Chart https://amzn.to/3S8ADNT Contact Derek [email protected] www.zegafinancial.com

Derek Moore and Jay Pestrichelli, CEO of ZEGA Financial, follow up on last week's PE ration (useless?) discussion explaining how stocks go up or down based on earnings, multiples, and other factors. Then they delve into correlations between the US Dollar Index and the S&P 500 Index. Later, the surprising fact that as Japan's Nikkei Index makes 35-year all-time highs they are in a technical recession. Finally, more evidence shows that inflation may be stickier and some that it may not. As always, they'll have some recommendations! Explaining how EPS earnings per share works How the PE can change due to earnings going up or the multiple going up How a stocks movement from one year to the next can be attributed to earnings and multiples How the correlation between the US Dollar Index and the S&P 500 Index has flipped of late Why a lower dollar helps large multinational companies earnings Congratulations, Japan is making all-time highs while in a technical recession What is a technical recession that everyone is now calling 2 quarters of negative GDP growth Car insurance premiums rose another 20% year over year…inflationary? How lagging price changes may continue to be sticky for inflation Looking at how OER Owners Equivalent Rent has been trending lower How higher rates may have put pricing pressure on rents How market returns and earnings growth aren't the same every year Mentioned in this Episode: Historical Returns on Stocks, Bonds and Bills: 1928-2023 NYU Aswath Damodaran https://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/histretSP.html Previous Week's Podcast: Is the Forward PE Useless?| S&P 500 Election Seasonality | Gen Z vs. Gen X Special https://podcasts.apple.com/us/podcast/is-the-forward-pe-useless-s-p-500-election/id1432836154?i=1000644953963 Jay Pestrichelli's book Buy and Hedge https://amzn.to/3jQYgMt Derek's new book on public speaking Effortless Public Speaking https://amzn.to/3hL1Mag Derek Moore's book Broken Pie Chart https://amzn.to/3S8ADNT Contact Derek [email protected] www.zegafinancial.com

Derek Moore and Jay Pestrichelli, CEO of ZEGA Financial, ask whether forward PE ratios are predictive of future market direction? Then they review how the S&P 500 Index has performed during each presidential election going back to 1996. Does it matter which party (Republicans or Democrats) are in office for markets? Is Tesla going to get kicked out of the Magnificent 7? Later Jay and Derek are joined by two Gen Z'ers (Zander and Bobby), to explore what their views are on money, markets, and take some questions. Explaining what the forward PE is for the S&P 500 Index What are the current forward EPS estimates for the S&P 500 Index What if Forward PE ratios don't tell us too much about future direction for markets? Cocoa futures go parabolic during latest spike Where cocoa beans come from Delinquencies on auto loans rise Seasonality in markets during presidential election years Stock market returns when Republicans vs Democrats controlling presidency, senate, and house Magnificent 6? Is Tesla going to get kicked out of magnificent 7? Gen Z trading options Does Gen Z really invest as much as the media suggests? Where does Gen Z get their financial education online? Quick explanation on the option greeks How stocks are discounting the known future of companies Surprising data on historic stock returns vs real estate Mentioned in this Episode: Cocoa prices soar https://www.ft.com/content/c163633a-cd9e-4962-8b7f-3d6c44463405 Historical Returns on Stocks, Bonds and Bills: 1928-2023 NYU Aswath Damodaran https://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/histretSP.html Previous Week's Podcast: Too Focused on Fed Rates?| META Earnings Implied Volatility | NAV Erosion Mythhttps://podcasts.apple.com/us/podcast/too-focused-on-fed-rates-meta-earnings-implied-volatility/id1432836154?i=1000644131131 Jay Pestrichelli's book Buy and Hedge https://amzn.to/3jQYgMt Derek's new book on public speaking Effortless Public Speaking https://amzn.to/3hL1Mag Derek Moore's book Broken Pie Chart https://amzn.to/3S8ADNT Contact Derek [email protected] www.zegafinancial.com

Derek Moore and Jay Pestrichelli, CEO of ZEGA Financial, discuss the Fed and Powell press conference market reaction. Plus, they look at META and Apple option's implied volatilities did or didn't predict the post earnings moves. 1994-95 experience in Fed rates and bond yields compared to today. Later, they set the record straight on what NAV erosion is, why the Shiller PE may not be predictive of markets, low response rates to economic surveys, and correlation between CPI and shipping container rates. Fed Meeting Powell press conference roiled markets for all of 1 day Who is right, the bond market or the stock market on rates? Typical moves in bond yields around fed meetings and outside of fed meetings The Fed Funds rate and the 10-year treasury bond yield aren't as related as you think Looking back at the 1994-95 Fed rate hiking and easing cycle META blows out earnings and adds the most market cap ever in one day Looking at META options implied volatility pre-earnings to see if it got it right Reviewing Apple's ATM straddle, implied volatility, and post earnings move Confusion around what the meaning of NAV erosion is Total return which includes dividends vs price return. Correlation between CPI year over year change and container shipping rates JOLTS Job Openings Less Turnover Survey response rates drop How economic surveys sample small amounts to gauge total economy Shiller PE CAPE Ratio and predictive power Mentioned in this Episode: 1994-95 All Over Again in Markets? https://podcasts.apple.com/us/podcast/1994-95-all-over-again-in-markets/id1432836154?i=1000590865306 BLS Bureau of Labor Statistics January 2024 employment report https://www.bls.gov/news.release/pdf/empsit.pdf Previous Week's Podcast: What Option Volatility Means for Markets | Is the Market Too Dovish on Interest Rate Expectations? | Does the Fed Need an Economics Lesson? https://podcasts.apple.com/us/podcast/what-option-volatility-means-for-markets-is-the/id1432836154?i=1000642385904 Jay Pestrichelli's book Buy and Hedge https://amzn.to/3jQYgMt Derek's new book on public speaking Effortless Public Speaking https://amzn.to/3hL1Mag Derek Moore's book Broken Pie Chart https://amzn.to/3S8ADNT Contact Derek [email protected] www.zegafinancial.com

Derek Moore and Jay Pestrichelli, CEO of ZEGA Financial, are it at once again where they analyze Tesla's implied volatility right before earnings vs what happened. Did the option's market misprice premiums? Also, in the episode they talk about Bitcoin's drop as a sell the news buy the rumor example while Derek argues that Bitcoin's volatility make it unusable as a currency to transact business. Later they dive into some data showing that when markets are up 20% the year before the election, election years historically have never been down and does that mean anything for 2024? Finally, they talk about China's selloff relative to US markets and how everyone thought emerging markets would be the thing in 2023. Bitcoin in a bear market drawing down greater than 20% from pre-ETF launch high Bitcoin at least in the short term seems like people bought the rumor but are selling the news Can Bitcoin be a currency if it drops 20% within a month? What is an option's implied volatility mean vs an option's historical volatility Looking at the price of the at the money straddle on Tesla right before earnings How to figure out what the options market is pricing in for a 1 standard deviation move Post Tesla earnings did the markets accurately price in how much Tesla moved after earnings? 2023 was up > 20% so what does that mean for election year based on some data? Election year and the markets China's stock market gets a little rocky but no bearing on US markets? Emerging markets were picked at the beginning of 2023 to close the gap on US markets Emerging markets still underperforming the S&P 500 Index Explaining how companies earnings in S&P 500 Index are aggregated together not weighted Comparing Apple's earnings in a quarter to Starbucks and why the big 7 matter most right now Semiconductors weighting in the S&P 500 Index hits a high Semiconductors as the picks and shovels, bluejeans play for AI? Mentioned in this Episode: What Option Volatility Means for Markets | Is the Market Too Dovish on Interest Rate Expectations? | Does the Fed Need an Economics Lesson? https://podcasts.apple.com/us/podcast/what-option-volatility-means-for-markets-is-the/id1432836154?i=1000642385904 Hedging With Options Examples | Soft Landing? | US Congress Trading Returns | Is Good News or Bad News Good? https://podcasts.apple.com/us/podcast/hedging-with-options-examples-soft-landing-us-congress/id1432836154?i=1000640844619 Jay Pestrichelli's book Buy and Hedge https://amzn.to/3jQYgMt Derek's new book on public speaking Effortless Public Speaking https://amzn.to/3hL1Mag Derek Moore's book Broken Pie Chart https://amzn.to/3S8ADNT Contact Derek [email protected] www.zegafinancial.com

Derek Moore and Jay Pestrichelli, CEO of ZEGA Financial, are back to discuss whether the Fed grasps how prices historically always rise. That prices never drop and inflation dropping doesn't mean prices go down. Then they discuss the forward earnings estimates showing growth for the S&P 500 Index while comparing price to sales compared to January of 2022. Later, they discuss what the option volatility markets are signaling for the S&P 500 over the near term. All that and more plus is the market pricing in too many rate cuts? Is the market pricing in too many rate cuts? What the option volatility markets are signaling for the S&P 500 Inflation dropping doesn't mean prices go down Supply side inflation vs demand side inflation Why throwing money (stimulus) into the economy during a supply side problem was misguided Reviewing option market volatility and what the volatility indicators are telling us about markets The volatility of volatility (VVIX) movements of late Forward earnings estimates point to growth expectations for the S&P 500 Index Mentioned in this Episode: Hedging With Options Examples | Soft Landing? | US Congress Trading Returns | Is Good News or Bad News Good? https://podcasts.apple.com/us/podcast/hedging-with-options-examples-soft-landing-us-congress/id1432836154?i=1000640844619 Bitcoin ETF Sell the News? | Expect Stock Market Corrections | Value vs. Growth | Travel Inflation Cooling?https://podcasts.apple.com/us/podcast/bitcoin-etf-sell-the-news-expect-stock-market/id1432836154?i=1000641595251 Jay Pestrichelli's book Buy and Hedge https://amzn.to/3jQYgMt Derek's new book on public speaking Effortless Public Speaking https://amzn.to/3hL1Mag Derek Moore's book Broken Pie Chart https://amzn.to/3S8ADNT Contact Derek [email protected] www.zegafinancial.com

Derek Moore and Mike Puck of ZEGA Financial join up to discuss the run up and selloff in bitcoin around the bitcoin spot etf launches. Is it the obvious buy the rumor sell the news situation? How CPI components like lodging away from home and travel pricing are starting to cool. Later, examining the value vs growth debate and whether this is the year for value to finally have its day. Plus, forward PE valuations and how they have fluctuated over the last 2 years. Bitcoin ETFs finally launch Bitcoin prices rally ahead of the ETF launch and selloff on launch day Buy the rumor sell the news? Why value stocks have had difficulty outpacing growth Cost of capital value stocks vs growth stocks CPI travel components are cooling off bringing some pricing power back to consumers Forward PE ratios How the forward multiple has expanded after dropping in 2022 Why corrections are normal Historically the markets suffer corrections but are often up for the year 1987 crash was big but market actually ended the year up Once again why predictions and guessing market direction can be futile Mentioned in this Episode: Hedging With Options Examples | Soft Landing? | US Congress Trading Returns | Is Good News or Bad News Good? https://podcasts.apple.com/us/podcast/hedging-with-options-examples-soft-landing-us-congress/id1432836154?i=1000640844619 2024 Predictions | Late Year Rally Bullish? | What if Investors Are Expecting Too Many Rate Cuts? https://podcasts.apple.com/us/podcast/2024-predictions-late-year-rally-bullish-what-if-investors/id1432836154?i=1000640245688 0 DTE Options to Blame for Selloff? | 2024 Targets for S&P 500 Index | Fed Dot Plots Always Wrong?https://podcasts.apple.com/us/podcast/0-dte-options-to-blame-for-selloff-2024-targets-for/id1432836154?i=1000639530301 Jay Pestrichelli's book Buy and Hedge https://amzn.to/3jQYgMt Derek's new book on public speaking Effortless Public Speaking https://amzn.to/3hL1Mag Derek Moore's book Broken Pie Chart https://amzn.to/3S8ADNT Contact Derek [email protected] www.zegafinancial.com

Derek Moore and Jay Pestrichelli, CEO of ZEGA Financial, are back this week to discuss some hedging examples and how hedging is cheap right now. They even go through a few examples. Then they get into the sharp rise in container shipping costs before discussing the weaker PMI Services data. Later they note Bloomberg's data showing articles mentioning "soft landing" are the highest since the 2000-2001 recession. A fun segment where they go through data from Unusual Whales showing the 2023 returns from members of congress and which members traded the most including options. Finally, they discuss whether so goes January goes the rest of the year in markets is a good indicator. The cost of hedging with options is cheap right now. Examples of hedging using the S&P 500 Index ETF SPY and Nvidia Zero cost collars to hedge downside risk. Is good news in markets or bad news in markets good news? Container shipping costs spike due to the Red Sea and Suez Canal re-routing. PMI Services data shows employment dipped below 50, which is contraction. What is the PMI Services Survey? "Soft Landing" shows up in Bloomberg articles the most since the 2000-2001 recession. Which members of the US Congress beat the markets last year 2023? Unusual Whales publishes report showing number of trades and performance of US Congress Which congressman traded over 4000 times last year? What does January performance say about the rest of the year's performance in markets? NY Fed global supply chain pressure index Mentioned in this Episode: Report from Unusual Whales showing 2023 members of congress trading returns https://unusualwhales.com/politics/article/congress-trading-report-2023 December ISM Services PMI report https://www.ismworld.org/supply-management-news-and-reports/reports/ism-report-on-business/services/december/ NY Federal Reserve Bank Global Supply Chain Pressure Index (GSCPI) https://www.newyorkfed.org/research/policy/gscpi#/interactive 2024 Predictions | Late Year Rally Bullish? | What if Investors Are Expecting Too Many Rate Cuts? https://podcasts.apple.com/us/podcast/2024-predictions-late-year-rally-bullish-what-if-investors/id1432836154?i=1000640245688 0 DTE Options to Blame for Selloff? | 2024 Targets for S&P 500 Index | Fed Dot Plots Always Wrong?https://podcasts.apple.com/us/podcast/0-dte-options-to-blame-for-selloff-2024-targets-for/id1432836154?i=1000639530301 Jay Pestrichelli's book Buy and Hedge https://amzn.to/3jQYgMt Derek's new book on public speaking Effortless Public Speaking https://amzn.to/3hL1Mag Derek Moore's book Broken Pie Chart https://amzn.to/3S8ADNT Contact Derek [email protected] www.zegafinancial.com

Derek Moore and Jay Pestrichelli, CEO of ZEGA Financial, go through their 2024 predictions and review how right or wrong they were in 2023. Why predictions are so hard to make and why they are overrated. When markets go up over 10% in the final 2 months of the year historically what does that mean for returns the following year? How earnings growth and market returns are non-correlations. According to NAAIM Active Manager Equity exposure is now greater than 100% compared to the October lows where it was only around 30%. No surprise there as people are more bullish when markets are making highs. 2024 predictions covering interest rates, the fed, markets, earnings, gold, bitcoin, oil and more. Reviewing the 2023 predictions and how wrong or right they were. How investors and institutions tend to be more long stocks when markets are at highs How investor psychology gets in the way of buying when they should be buying Questioning that everyone sold stocks to go into money market funds. How bank assets may have rolled into money markets due to low interest rates at banks Comparing correlations between earnings growth in a year and the market returns When markets are down greater than 22% in a year, what is the average return the next year? What if investors are expecting too many Fed rate cuts? S&P 500 Index price vs EPS during bear markets When final two months of the year are up greater than 10% what are returns the following year? NAAIM Active Manager Equity exposure now 103% vs under 30% during October lows Mentioned in this Episode: 0 DTE Options to Blame for Selloff? | 2024 Targets for S&P 500 Index | Fed Dot Plots Always Wrong?https://podcasts.apple.com/us/podcast/0-dte-options-to-blame-for-selloff-2024-targets-for/id1432836154?i=1000639530301 Everyone Betting on Rate Cuts | Blackrock Buying 44% of Homes? | Record Call Option Volume & VVIX and VIX Out of Synch? https://podcasts.apple.com/us/podcast/everyone-betting-on-rate-cuts-blackrock-buying-44-of/id1432836154?i=1000638850473 No, Wall Street investors haven't bought 44% of homes this year https://finance.yahoo.com/news/no-wall-street-investors-haven-015642526.html Jay Pestrichelli's book Buy and Hedge https://amzn.to/3jQYgMt Derek's new book on public speaking Effortless Public Speaking https://amzn.to/3hL1Mag Derek Moore's book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547/ref=sr_1_1?keywords=broken+pie+chart&qid=1558722226&s=books&sr=1-1-catcorr Contact Derek [email protected] www.zegafinancial.com

Derek Moore and Jay Pestrichelli, CEO of ZEGA Financial, discuss how people are blaming the Wed 1.5% selloff on 0 DTE options while the CBOE says not so fast as dealers may have been buying stocks during the drawdown thus stabilizing markets. Later they talk shipping container rates spiking higher due to issues in the Suez Canal and Red Sea. Is this a fly in the ointment for inflation? Then they talk about how analysts making 2024 S&P 500 Index price and earnings estimates must get the forward 2025 earnings estimate right and what multiple the market will be trading at. What about oil in 2024? Analysts seem to be bearish, but Jay and Derek look at potential for refilling the SPR (strategic petroleum reserve). Finally, they talk VIX and VVIX and note how compressed the daily changes have been and what if anything that means going forward. 0 DTE Options (or ZERO Days to Expiration Options) are blamed for midweek selloff. Why the CBOE says 0 DTE options are not to blame and instead dealers were buying stocks. How market makers were a stabilizing force during the selloff rather than adding to selloff Are they getting wrong the impact of 0 DTE options? Why calls for Volmageddon 2.0 might be missing what caused Volmageddon 1.0 S&P 500 Index targets for 2024 vary quite a bit Why is it so hard to nail next years S&P 500 Index targets because you really need 2025 EPS. How analysts could have the same earnings targets but different multiple expectations Shipping container rates spiked due to the issues in the Red Sea leading to the Suez Canal Below the surface inflation pressure and remembering how container rates foretold inflation SPR Strategic Petroleum Reserve levels and whether refilling them will be inflationary. Gasoline prices have softened while analysts are pretty bearish on oil for 2024. Contrarian view might be to look at oil to recover which would move CPI. The Fed Dot Plots never wind up being correct. Is Diehard a Christmas movie or not? Mentioned in this Episode: Zero-Day Options Shouldn't Be Blamed for Selloff, Cboe Says https://www.bloomberg.com/news/articles/2023-12-21/zero-day-options-catch-blame-for-selloff-cboe-says-not-so-fast?embedded-checkout=true Everyone Betting on Rate Cuts | Blackrock Buying 44% of Homes? | Record Call Option Volume & VVIX and VIX Out of Synch? https://podcasts.apple.com/us/podcast/everyone-betting-on-rate-cuts-blackrock-buying-44-of/id1432836154?i=1000638850473 No, Wall Street investors haven't bought 44% of homes this year https://finance.yahoo.com/news/no-wall-street-investors-haven-015642526.html S&P 500 Targets | VIX Index Largest 7-Week declines | Simplifying Synthetic Long Stock with Covered Calls | Labor Force Participation https://podcasts.apple.com/us/podcast/s-p-500-targets-vix-index-largest-7-week-declines-simplifying/id1432836154?i=1000638193441 Dave Ramsey Wrong? | Huge VIX Options Bets | S&P 500 Seasonality | When Does Government Debt Become a Problem? https://podcasts.apple.com/us/podcast/dave-ramsey-wrong-huge-vix-options-bets-s-p-500-seasonality/id1432836154?i=1000636559171 Jay Pestrichelli's book Buy and Hedge https://amzn.to/3jQYgMt Derek's new book on public speaking Effortless Public Speaking https://amzn.to/3hL1Mag Derek Moore's book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547/ref=sr_1_1?keywords=broken+pie+chart&qid=1558722226&s=books&sr=1-1-catcorr Contact Derek [email protected] www.zegafinancial.com

Derek Moore and Jay Pestrichelli, CEO of ZEGA Financial, discuss the new consensus of the Fed doing multiple rate cuts so what could go wrong? Record call option volume while the VVIX makes a move higher while the VIX continues lower. Viral article said 44% of home sales were to big institutions like Blackrock and Innovation homes but it was less than 0.4%. Later they look at whether the Powell Fed and the Voelker Fed are similar in declaring mission accomplished. Finally, they cover how bullish investors have gotten now that we are close to the all-time highs again and any flies in the ointment economically. Consensus of multiple Fed rate cuts can be wrong, can it? Why when everyone on the same side sometimes surprises VIX vs the VVIX index What the VVIX spiking while the VIX moves lower means Comparing Chairman Powell's Fed today to Voelker's 1982 Fed and going forward for markets The AAII Bull – Bear survey points to high bullishness with market approaching all-time highs. 44% of home sales being bought by Blackrock? Not so fast! Atlanta Fed GDP is now ticking up again. Record Call option volume Fed rate probability tracker tool Mentioned in this Episode: No, Wall Street investors haven't bought 44% of homes this year https://finance.yahoo.com/news/no-wall-street-investors-haven-015642526.html S&P 500 Targets | VIX Index Largest 7-Week declines | Simplifying Synthetic Long Stock with Covered Calls | Labor Force Participation https://podcasts.apple.com/us/podcast/s-p-500-targets-vix-index-largest-7-week-declines-simplifying/id1432836154?i=1000638193441 Dave Ramsey Wrong? | Huge VIX Options Bets | S&P 500 Seasonality | When Does Government Debt Become a Problem? https://podcasts.apple.com/us/podcast/dave-ramsey-wrong-huge-vix-options-bets-s-p-500-seasonality/id1432836154?i=1000636559171 0DTE Options Analysis| Inflation Coming Back? | Strong US Dollar Impact https://podcasts.apple.com/us/podcast/0dte-options-analysis-inflation-coming-back-strong/id1432836154?i=1000628157831 Jay Pestrichelli's book Buy and Hedge https://amzn.to/3jQYgMt Derek's new book on public speaking Effortless Public Speaking https://amzn.to/3hL1Mag Derek Moore's book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547/ref=sr_1_1?keywords=broken+pie+chart&qid=1558722226&s=books&sr=1-1-catcorr Contact Derek [email protected] www.zegafinancial.com

Derek Moore and Jay Pestrichelli, CEO of ZEGA Financial, join up once again to discuss the drop in the VIX Index off the highs. How S&P 500 2024 targets are showing up and why investors may not care. Labor force participation turned down so what does that mean if anything? Finally, Simplifying what synthetic long stock strategies are and synthetic long stock with covered calls. What are the features and benefits? How are they like just owning stock and or owning stock with a covered call? What investors give up by selling covered calls in exchange for additional income. 2024 S&P 500 Year End Price Targets from the investment banks Why investors should probably ignore market predictions Largest VIX Index 7-week declines and whether its significant or no Unemployment remains low but labor force participation move lower What does Labor Force participation measure? What are synthetic option positions? What are synthetic long stock with a covered call position? What are the benefits of using synthetic options to build market exposure? Mentioned in this Episode: VIX Index Goes Nowhere | Cheap Puts to Hedge? |Cheaper to Rent Than Buy? | Markets During Presidential Election Years https://podcasts.apple.com/us/podcast/vix-index-goes-nowhere-cheap-puts-to-hedge-cheaper/id1432836154?i=1000637335338 Dave Ramsey Wrong? | Huge VIX Options Bets | S&P 500 Seasonality | When Does Government Debt Become a Problem? https://podcasts.apple.com/us/podcast/dave-ramsey-wrong-huge-vix-options-bets-s-p-500-seasonality/id1432836154?i=1000636559171 0DTE Options Analysis| Inflation Coming Back? | Strong US Dollar Impact https://podcasts.apple.com/us/podcast/0dte-options-analysis-inflation-coming-back-strong/id1432836154?i=1000628157831 Jay Pestrichelli's book Buy and Hedge https://amzn.to/3jQYgMt Derek's new book on public speaking Effortless Public Speaking https://amzn.to/3hL1Mag Derek Moore's book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547/ref=sr_1_1?keywords=broken+pie+chart&qid=1558722226&s=books&sr=1-1-catcorr Contact Derek [email protected] www.zegafinancial.com

Derek Moore and Jay Pestrichelli join up to discuss an unchanged VIX and VVIX index. Was our trading platform screen broken? Whether the VIX and VVIX Index is a coiled spring as they are both in compression mode of late. Then, they explore new data that shows the cost to buy a home vs rent is really high meaning its very costly to buy vs rent right now. Did the Fed cause this? Jay and Derek also explore how cheap 1 year out puts are on the S&P 500 Index right now. Does no one want protection? Finally, they dip their toes into the all to soon 2024 presidential election looking at data around how markets do during election years. Does it even matter if it's a Republican or Democrat? The VIX Index and the VVIX Index both closed unchanged on Wednesday this week Both VIX and VVIX are showing signs of compression in their standard deviations of late What smaller ranges over a period mean for the VIX and markets with regard to expected moves Not since the pre-Great Financial crisis has buying a home been more expensive than renting How now one ever compares the interest paid in a mortgage payment to rental payments Did the Federal Reserve cause rent inflation by freezing the housing market creating demand? The 1-year out at-the-money-puts are a cheap hedge right now, does anyone want hedged? How everyone wants to be hedged when markets are crashing but not when its cheap Why buying but hedging makes sense for the long haul. How do markets do in the 4th year of a presidential cycle election year? Market returns during presidential elections when democrats vs republicans get elected Mentioned in this Episode: Dave Ramsey Wrong? | Huge VIX Options Bets | S&P 500 Seasonality | When Does Government Debt Become a Problem? https://podcasts.apple.com/us/podcast/dave-ramsey-wrong-huge-vix-options-bets-s-p-500-seasonality/id1432836154?i=1000636559171 Total compounded annualized growth rate S&P 500 index by decade https://zegafinancial.com/blog/where-did-the-2010s-rank-for-total-return-on-sandp-500-index Probability of Recession? | Explaining How US Treasury Bond Auctions Work | S&P 500 Index Member Changes | Option Premium Intrinsic vs. Extrinsic https://podcasts.apple.com/us/podcast/probability-of-recession-explaining-how-us-treasury/id1432836154?i=1000635380296 Stock Market Returns after First Rate Cut https://podcasts.apple.com/us/podcast/stock-market-returns-after-first-rate-cut-yield-curve/id1432836154?i=1000634550774 Option Selling ETFs Boom | Probability of Future Fed Moves | Bad News is Good News on Employment https://podcasts.apple.com/us/podcast/option-selling-etfs-boom-probability-of-future-fed/id1432836154?i=1000633983056 0DTE Options Analysis| Inflation Coming Back? | Strong US Dollar Impact https://podcasts.apple.com/us/podcast/0dte-options-analysis-inflation-coming-back-strong/id1432836154?i=1000628157831 Jay Pestrichelli's book Buy and Hedge https://amzn.to/3jQYgMt Derek's new book on public speaking Effortless Public Speaking https://amzn.to/3hL1Mag Derek Moore's book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547/ref=sr_1_1?keywords=broken+pie+chart&qid=1558722226&s=books&sr=1-1-catcorr Contact Derek [email protected] www.zegafinancial.com

Derek Moore is back with Jay Pestrichelli this week where they analyze the recent viral video where Dave Ramsey suggests people can safely withdraw 8% forever in retirement. What doesn't make sense, what is left out, and why the assumptions may be faulty. Then, they discuss the market seasonality and whether this November pop higher already delivered a year end rally? Later Jay and Derek discuss the huge purchase of VIX calls this week and what it did to the VVIX Index as well as an interesting VIX option trade for December. Finally, they touch on Argentina's plan to dollarize the economy and when the US and other countries high debt to GDP can expect it to be a problem and what is so frustrating to traders making bearish bets against it. Dave Ramsey viral video saying 8% withdrawal rate on accounts will work forever How Dave Ramsey makes fun of people arguing for 3%-5% withdrawal rates The claim of simply investing in mutual funds making 12% annually doesn't add up How ignoring the sequence of return risk doesn't paint a true picture for retirees Dave Ramsey seems to imply even retirees should be 100% invested in equities How the sequence of returns only matters to returns when withdrawing or adding money Simple average annual return vs CAGR compounded annual growth rate Contrary to Dave Ramsey's advice not everyone should paying off their mortgage early What historical seasonality of the S&P 500 Index says about year end performance One of the largest November month returns on record for S&P 500 Index since 1928 What does Novembers month to date returns mean for seasonality? Sovereign government debt at historic highs measured as debt to GDP Argentina new president Javier Milei's plan to dollarize Argentina's history of debt defaults Discussing the huge VIX call trade that moved the VVIX Index this week Why people are buying VIX calls The VIX Index closed at the lowest level since January of 2020 Interesting VIX call breakeven levels for December calls Mentioned in this Episode: Total compounded annualized growth rate S&P 500 index by decade https://zegafinancial.com/blog/where-did-the-2010s-rank-for-total-return-on-sandp-500-index Probability of Recession? | Explaining How US Treasury Bond Auctions Work | S&P 500 Index Member Changes | Option Premium Intrinsic vs. Extrinsic https://podcasts.apple.com/us/podcast/probability-of-recession-explaining-how-us-treasury/id1432836154?i=1000635380296 Stock Market Returns after First Rate Cut https://podcasts.apple.com/us/podcast/stock-market-returns-after-first-rate-cut-yield-curve/id1432836154?i=1000634550774 Option Selling ETFs Boom | Probability of Future Fed Moves | Bad News is Good News on Employment https://podcasts.apple.com/us/podcast/option-selling-etfs-boom-probability-of-future-fed/id1432836154?i=1000633983056 0DTE Options Analysis| Inflation Coming Back? | Strong US Dollar Impact https://podcasts.apple.com/us/podcast/0dte-options-analysis-inflation-coming-back-strong/id1432836154?i=1000628157831 Jay Pestrichelli's book Buy and Hedge https://amzn.to/3jQYgMt Derek's new book on public speaking Effortless Public Speaking https://amzn.to/3hL1Mag Derek Moore's book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547/ref=sr_1_1?keywords=broken+pie+chart&qid=1558722226&s=books&sr=1-1-catcorr Contact Derek [email protected] www.zegafinancial.com

Derek Moore is back with Jay Pestrichelli, CEO of ZEGA Financial, to review the Goldman Sachs probability of recession and Fed rate forecast for 2024. Then they do a deeper dive on key aspects of US Treasury Bond auctions. Hint, it's a Dutch auction and how to read the results of treasury auctions including the bid to cover ratio. Later they talk through changes in the makeup of the S&P 500 Index companies and what the impact on earnings may be. Plus, how even when stocks go in and out of the index how the "divisor" calculation smooths the S&P 500 price out. Finally, Jay and Derek do a deep dive into the difference of options premium intrinsic value vs. extrinsic value using some examples. Oh, we have some recommendations as well. What does Goldman Sachs have for probability of recession now? What does Goldman Sachs estimate for Fed interest rates in 2024? How do US Treasury bond auctions work? What is a Dutch auction? What is the bid to cover ratio mean in a US Treasury auction? Looking at supply and demand metrics within Treasury Bond auctions. S&P 500 Index committee that determines what companies come in and out of the index. What is the S&P 500 Index divisor? The largest company not in S&P 500 index is Uber? Index changes underappreciated for earnings growth? Airbnb, Blackstone, Lululemon all added to the S&P 500 Index in 2023 What is the difference between intrinsic premium and extrinsic premium in options? How the option greeks like delta, gamma, theta impact extrinsic premium but not intrinsic Comparing covered calls to ITM short puts on an index Time decay implied in extrinsic premium When covered calls are likely to get called away around dividends and extrinsic premium left Why are ITM cash secured puts misunderstood Mentioned in this Episode: Stock Market Returns after First Rate Cut https://podcasts.apple.com/us/podcast/stock-market-returns-after-first-rate-cut-yield-curve/id1432836154?i=1000634550774 Option Selling ETFs Boom | Probability of Future Fed Moves | Bad News is Good News on Employment https://podcasts.apple.com/us/podcast/option-selling-etfs-boom-probability-of-future-fed/id1432836154?i=1000633983056 0DTE Options Analysis| Inflation Coming Back? | Strong US Dollar Impact https://podcasts.apple.com/us/podcast/0dte-options-analysis-inflation-coming-back-strong/id1432836154?i=1000628157831 Jay Pestrichelli's book Buy and Hedge https://amzn.to/3jQYgMt Derek's new book on public speaking Effortless Public Speaking https://amzn.to/3hL1Mag Derek Moore's book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547/ref=sr_1_1?keywords=broken+pie+chart&qid=1558722226&s=books&sr=1-1-catcorr Contact Derek [email protected] www.zegafinancial.com

Derek Moore does a deep dive asking the question why is everyone rooting for the Fed to lower rates? If the Fed must lower interest rates, doesn't that mean there is trouble? Should investors instead be rooting for stable but higher rates where the long end un-inverts as a proxy for higher growth? What happens to market performance between the last Fed hike and first rate cut? What is the historical performance of markets post the first Fed rate cut? Then looking at past yield curve (10-year treasury minus 3-month treasury yield) before recessions. How the Fed normally inverts and then un-inverts the curve by hiking and then lowering interest rates. Finally, what is the NBER (National Bureau of Economic Research Board) looking at to determine recessions? What is the inverted yield curve? How have past yield curves inverted and un-inverted around recessions? How does the stock market perform between the final rate hike and first rate cut? How does the stock market perform after the first rate cut by the Fed? Are rate cuts a sign of strength in the economy? How the Fed typically causes inversions by hiking the Fed funds rate. Historically the yield curve un-inverted because the Fed is cutting rates. Will this time be different where long rates move higher to un-invert the curve? What is the NBER National Bureau of Economic Research looking at for recessions? How predictive of recessions is the yield curve? Mentioned in this Episode: Liz Young Sofi article showing S&P 500 Index market returns from last rate cut to first hike and post first Fed cut https://www.sofi.com/article/investment-strategy/liz-looks-at-recent-rally/ FRED Spread of 10-year treasury bond to 3 month treasury bill difference updated https://fred.stlouisfed.org/series/T10Y3M NBER business cycle dates (past recession dates) https://www.nber.org/research/data/us-business-cycle-expansions-and-contractions Option Selling ETFs Boom | Probability of Future Fed Moves | Bad News is Good News on Employment https://podcasts.apple.com/us/podcast/option-selling-etfs-boom-probability-of-future-fed/id1432836154?i=1000633983056 0DTE Options Analysis| Inflation Coming Back? | Strong US Dollar Impact https://podcasts.apple.com/us/podcast/0dte-options-analysis-inflation-coming-back-strong/id1432836154?i=1000628157831 Jay Pestrichelli's book Buy and Hedge https://amzn.to/3jQYgMt Derek's new book on public speaking Effortless Public Speaking https://amzn.to/3hL1Mag Derek Moore's book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547/ref=sr_1_1?keywords=broken+pie+chart&qid=1558722226&s=books&sr=1-1-catcorr Contact Derek [email protected] www.zegafinancial.com

Derek Moore and ZEGA Financial CEO Jay Pestrichelli ponder whether the Fed is truly done and if the street is too optimistic on rate cuts in 2024. Plus, they discuss new data showing option selling ETFs are having record assets between inflows and new entrants. Bad news is good news still as employment ticks up. They delve deeper into the numbers including labor participation rate, size of workforce, and more in the household survey data. Finally, they talk about options volatility and how it got sucked out of the market this week. Option selling ETFs set new record high for assets Is the Fed really done raising rates? Is the street too optimistic about Fed rate cutting in 2024? Sahm Recession Rule indicator says recent employment data hints at recession 3-Month moving average of the unemployment rate in the Sahm recession rule indicator VIX hits lowest level in a while Earnings and Nvidia options Bad news is good news regime is still alive and well in markets US unemployment rate ticks up to 3.9% Understanding the household survey numbers What is the labor force participation rate? Size of the US workforce Mentioned in this Episode: BLS US Unemployment Rate report https://www.bls.gov/news.release/empsit.nr0.htm Correction Territory | No Fear Yet in Markets? | When Does Capitulation Happen in Markets? https://podcasts.apple.com/us/podcast/correction-territory-no-fear-yet-in-markets-when-does/id1432836154?i=1000632979045 Fed Rate probability tracker https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html 0DTE Options Analysis| Inflation Coming Back? | Strong US Dollar Impact https://podcasts.apple.com/us/podcast/0dte-options-analysis-inflation-coming-back-strong/id1432836154?i=1000628157831 Jay Pestrichelli's book Buy and Hedge https://amzn.to/3jQYgMt Derek's new book on public speaking Effortless Public Speaking https://amzn.to/3hL1Mag Derek Moore's book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547/ref=sr_1_1?keywords=broken+pie+chart&qid=1558722226&s=books&sr=1-1-catcorr Contact Derek [email protected] www.zegafinancial.com

Derek Moore and ZEGA Financial CEO Jay Pestrichelli to discuss how despite the correction territory (markets down 10% from top), the VIX index hasn't shown any real fear. So, what will it take to see capitulation in the markets? Thus far high yield spreads haven't reflected too much worry. Then Derek is tired of pundits talking about equal weighted market vs the "Magnificent 7" comparison as this is why you buy the index! Later, they discuss the new Fed survey showing how much net worth one needs to get into the top 10% plus median net worth by age range. All this and more plus some recommendations. Is there enough fear in the stock market? Why hasn't the VIX spike more during a 10% stock market correction? VVIX vs VIX What would capitulation in the stock market look like right now? What is a stock market correction vs a bear market? Checking in the on High Yield bond spread Is rebalancing traditional portfolios from stocks to bonds causes equity weakness? The "Magnificent 7" Tesla Apple Google Meta Microsoft Nvidia Amazon Equal weighted stock indexes vs the S&P 500 Index Fed survey on household finances shows how much net worth to get into different percentiles. What is the median net worth by age group? How US median net worth has increased. Fed Survey of Consumer Finances (SCF) Mentioned in this Episode: Fed Survey of Consumer Finances (SCF) showing median net worth and income by age https://www.federalreserve.gov/econres/scfindex.htm Powell vs. Bond Traders | Option Volatility During Earnings | Mortgage Rate Spread to Treasuries https://podcasts.apple.com/us/podcast/powell-vs-bond-traders-option-volatility-during-earnings/id1432836154?i=1000632184399 0DTE Options Analysis| Inflation Coming Back? | Strong US Dollar Impact https://podcasts.apple.com/us/podcast/0dte-options-analysis-inflation-coming-back-strong/id1432836154?i=1000628157831 Implied Volatility Deep Dive | Real Interest Rate Yields | The Big Short | Tesla vs Nvidia https://podcasts.apple.com/us/podcast/implied-volatility-deep-dive-real-interest-rate-yields/id1432836154?i=1000627400400 The Big Short Movie and Credit Default Swaps Explained https://open.spotify.com/episode/6FG0xHkxfhSXEtbJbFbDF6 Jay Pestrichelli's book Buy and Hedge https://amzn.to/3jQYgMt Derek's new book on public speaking Effortless Public Speaking https://amzn.to/3hL1Mag Derek Moore's book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547/ref=sr_1_1?keywords=broken+pie+chart&qid=1558722226&s=books&sr=1-1-catcorr Contact Derek [email protected] www.zegafinancial.com

Derek Moore is back with ZEGA Financial CEO Jay Pestrichelli to discuss whether Jay Powell or bond traders are in charge of interest rate policy? How option volatility changes around earnings announcements. Why the spread between the 30-year Mortgage Rate and 10-year treasuries is historically wide including MBS (Mortgage-Backed Securities) impact. Plus, how MBS are doing something kind of weird right now. Later they discuss financial conditions, how high yield loans and bonds have greatly outperformed "safer" fixed income areas, and the breadth of the market vs the "magnificent 7" companies. Is the bond market doing the Fed and Jay Powells work for them? How higher interest rates tighten financial conditions. The Fed not buying bonds creating lack of buyers? Typical spread between the 30-year mortgage rate and the rate on US 10-year treasuries How the spread is historically high (like 2 standard deviations) When the 30-year mortgage spread over treasuries widened in the past Does this mean mortgage rates need to come down or treasury rates have more to rise? What are MBS Mortgage-Backed Securities How MBS bond convexity is positive (hint, it's almost always negative) Interest rates moving higher means less refinancing (and home sales) extending loan durations. What is bond convexity and how does it relate to interest rate sensitivity risk High yield bonds and loans surprising outperformance over investment grade and treasuries Divergence is higher now than before Silicon Valley Bank Chicago Fed National Financial Conditions Index S&P 500 Equal Weight Index vs the magnificent 7 How the S&P 500 Index forecasted next 12-month earnings are higher now The forward PE ration of the S&P 500 Index back down to about 17.5 PE Are we behind the trough in earnings? Mentioned in this Episode: Deep Dive: Can Bonds Recover? | TLT ETF Breakdown |Inflation and the Fed https://podcasts.apple.com/us/podcast/deep-dive-can-bonds-recover-tlt-etf-breakdown-inflation/id1432836154?i=1000631358491 Bond Market Collapse https://podcasts.apple.com/us/podcast/bond-market-collapse-oil-price-problems-bond-stock/id1432836154?i=1000630742799 Cheap vs Expensive Options | Warren Buffett on Options | Fed Powell Presser https://podcasts.apple.com/us/podcast/cheap-vs-expensive-options-warren-buffett-on-options/id1432836154?i=1000629058900 0DTE Options Analysis| Inflation Coming Back? | Strong US Dollar Impact https://podcasts.apple.com/us/podcast/0dte-options-analysis-inflation-coming-back-strong/id1432836154?i=1000628157831 Implied Volatility Deep Dive | Real Interest Rate Yields | The Big Short | Tesla vs Nvidia https://podcasts.apple.com/us/podcast/implied-volatility-deep-dive-real-interest-rate-yields/id1432836154?i=1000627400400 GameStop Short Squeeze by the Reddit Wall Street Bets Traders Explained https://podcasts.apple.com/us/podcast/broken-pie-chart/id1432836154?i=1000507187446 The Big Short Movie and Credit Default Swaps Explained https://open.spotify.com/episode/6FG0xHkxfhSXEtbJbFbDF6 Margin Call Movie and Understanding Value at Risk https://open.spotify.com/episode/2XJ58KAoQKw2sdC48KHyPp Jay Pestrichelli's book Buy and Hedge https://amzn.to/3jQYgMt Derek's new book on public speaking Effortless Public Speaking https://amzn.to/3hL1Mag Derek Moore's book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547/ref=sr_1_1?keywords=broken+pie+chart&qid=1558722226&s=books&sr=1-1-catcorr Contact Derek [email protected] www.zegafinancial.com

Derek Moore explains what it would take interest rate wise for bonds and TLT to get back to breakeven on price. A lot of misunderstanding is out there on buying bonds at the bottom and what that means. How bonds have different drivers than stocks. Plus, inflation is ticking back up and what that means for the Fed. Finally, a deep dive into TLT components and the math behind what those buying TLT are hoping for. What would make bonds go back up? Examining TLT iShares 20+ etf components Effective Duration to show how interest rates affect bond etfs and bonds. Math behind movement in bonds What would it take for TLT to get back to breakeven with regard to interest rates? Looking at 30-year treasuries issued in 2020 that are down greater than 50% Inflation ticked back up with CPI year over year reaching 3.7% YoY from its low of 3% What does inflation moving back up mean for the Fed and interest rates? Earnings seasons begins with expectations rising Are earnings still the most important driver of price? Multiple expansion vs earnings falling Mentioned in this Episode: Bond Market Collapse https://podcasts.apple.com/us/podcast/bond-market-collapse-oil-price-problems-bond-stock/id1432836154?i=1000630742799 Government Shutdowns & Markets | Short ITM Puts Alternative to Covered Calls | Why Hedging Works https://podcasts.apple.com/us/podcast/government-shutdowns-markets-short-itm-puts-alternative/id1432836154?i=1000629813419 John Hussman 12-year forward nominal return estimates chart https://www.hussmanfunds.com/comment/mc230724/ Cheap vs Expensive Options | Warren Buffett on Options | Fed Powell Presser https://podcasts.apple.com/us/podcast/cheap-vs-expensive-options-warren-buffett-on-options/id1432836154?i=1000629058900 0DTE Options Analysis| Inflation Coming Back? | Strong US Dollar Impact https://podcasts.apple.com/us/podcast/0dte-options-analysis-inflation-coming-back-strong/id1432836154?i=1000628157831 Warren Buffett and Charlie Munger Berkshire Hathaway meeting discuss using and pricing options https://www.youtube.com/watch?v=SMkpou-YBGw Implied Volatility Deep Dive | Real Interest Rate Yields | The Big Short | Tesla vs Nvidia https://podcasts.apple.com/us/podcast/implied-volatility-deep-dive-real-interest-rate-yields/id1432836154?i=1000627400400 GameStop Short Squeeze by the Reddit Wall Street Bets Traders Explained https://podcasts.apple.com/us/podcast/broken-pie-chart/id1432836154?i=1000507187446 The Big Short Movie and Credit Default Swaps Explained https://open.spotify.com/episode/6FG0xHkxfhSXEtbJbFbDF6 Margin Call Movie and Understanding Value at Risk https://open.spotify.com/episode/2XJ58KAoQKw2sdC48KHyPp Jay Pestrichelli's book Buy and Hedge https://amzn.to/3jQYgMt Derek's new book on public speaking Effortless Public Speaking https://amzn.to/3hL1Mag Derek Moore's book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547/ref=sr_1_1?keywords=broken+pie+chart&qid=1558722226&s=books&sr=1-1-catcorr Contact Derek [email protected] www.zegafinancial.com

Derek Moore and Jay Pestrichelli, CEO of ZEGA Financial, observe the destruction in long term treasury bonds due to the reflation of the yield curve. How does the market do with higher rates? What does a flattening yield curve mean for the economy? Bond and Stock correlations mean bonds not protecting portfolios? The Hussman 12-year forward return gauge. Strategic petroleum reserve (SPR) now only has 17 days of supply left. And by the way, there is still a lot of good news like improving mortality rates around the world. That and more including some recommendations. How much long-term US Treasury Bonds have dropped from the high The yield curve is getting flatter meaning long rates are rising Cam Harvey's 10/3 yield curve inversion is on the path the un-inverting? How the yield curve un-inverts before recessions Examining a 100-year Austrian bond and how it once was up 250% and now down 40% Stock and bond correlations going closer to 100% Starting interest rates vs. the stock market since 1926 Starting inflation rates vs. the stock market since 1926 Comparing the yield curve today vs. early September John Hussman estimated 12-year annual nominal total returns SPR Strategic Petroleum Reserve and the days left of inventory (it is getting lower) Infant mortality rates continue falling and are at lowest levels back to 400 BC Mentioned in this Episode: Government Shutdowns & Markets | Short ITM Puts Alternative to Covered Calls | Why Hedging Works https://podcasts.apple.com/us/podcast/government-shutdowns-markets-short-itm-puts-alternative/id1432836154?i=1000629813419 John Hussman 12-year forward nominal return estimates chart https://www.hussmanfunds.com/comment/mc230724/ Cheap vs Expensive Options | Warren Buffett on Options | Fed Powell Presser https://podcasts.apple.com/us/podcast/cheap-vs-expensive-options-warren-buffett-on-options/id1432836154?i=1000629058900 0DTE Options Analysis| Inflation Coming Back? | Strong US Dollar Impact https://podcasts.apple.com/us/podcast/0dte-options-analysis-inflation-coming-back-strong/id1432836154?i=1000628157831 Warren Buffett and Charlie Munger Berkshire Hathaway meeting discuss using and pricing options https://www.youtube.com/watch?v=SMkpou-YBGw Implied Volatility Deep Dive | Real Interest Rate Yields | The Big Short | Tesla vs Nvidia https://podcasts.apple.com/us/podcast/implied-volatility-deep-dive-real-interest-rate-yields/id1432836154?i=1000627400400 GameStop Short Squeeze by the Reddit Wall Street Bets Traders Explained https://podcasts.apple.com/us/podcast/broken-pie-chart/id1432836154?i=1000507187446 The Big Short Movie and Credit Default Swaps Explained https://open.spotify.com/episode/6FG0xHkxfhSXEtbJbFbDF6 Margin Call Movie and Understanding Value at Risk https://open.spotify.com/episode/2XJ58KAoQKw2sdC48KHyPp Jay Pestrichelli's book Buy and Hedge https://amzn.to/3jQYgMt Derek's new book on public speaking Effortless Public Speaking https://amzn.to/3hL1Mag Derek Moore's book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547/ref=sr_1_1?keywords=broken+pie+chart&qid=1558722226&s=books&sr=1-1-catcorr Contact Derek [email protected] www.zegafinancial.com

Derek Moore and Jay Pestrichelli, CEO of ZEGA Financial, look at how markets have done during past Government Shutdowns. The S&P 500 Index during, and 3 and 6 months later. Then they get in dept on why selling in-the-money puts is the same as selling covered calls on stock. What are cash covered puts? How US Treasuries yielding 5% plus may tip the scales. The risks and payoffs of one versus the other. How cash settled European style options differ from American style options at expiration (and before). Finally, they touch on why hedging works to take pressure off investors while reducing the need to time markets. Of course, some recommendations as well. How have markets historically performed around government shutdowns Should investors fear government shutdowns? How long do government shutdowns typically last? What was the longest government (or partial) shutdown? Why hedging all the time helps investors stay invested. The hedgers opportunity where potential exists to buy more shares lower. What is an in-the-money (ITM) cash secured put? What are the mechanics of a cash secured put? What are cash settled European style option characteristics? What are American style options with assignment and exercise components? Risk of American style options vs cash settled options. How selling ITM Cash Secured Puts is like buying the underlying and selling covered calls. Why do investors get confused with cash secured puts or in-the-money put selling? Payoffs and risks of ITM cash covered puts. Why interest rates on short-term treasuries above 5% are a potential game changer. Treasuries with ITM short puts vs long stock with covered calls Mentioned in this Episode: Cheap vs Expensive Options | Warren Buffett on Options | Fed Powell Presser https://podcasts.apple.com/us/podcast/cheap-vs-expensive-options-warren-buffett-on-options/id1432836154?i=1000629058900 0DTE Options Analysis| Inflation Coming Back? | Strong US Dollar Impact https://podcasts.apple.com/us/podcast/0dte-options-analysis-inflation-coming-back-strong/id1432836154?i=1000628157831 Warren Buffett and Charlie Munger Berkshire Hathaway meeting discuss using and pricing options https://www.youtube.com/watch?v=SMkpou-YBGw Implied Volatility Deep Dive | Real Interest Rate Yields | The Big Short | Tesla vs Nvidia https://podcasts.apple.com/us/podcast/implied-volatility-deep-dive-real-interest-rate-yields/id1432836154?i=1000627400400 GameStop Short Squeeze by the Reddit Wall Street Bets Traders Explained https://podcasts.apple.com/us/podcast/broken-pie-chart/id1432836154?i=1000507187446 The Big Short Movie and Credit Default Swaps Explained https://open.spotify.com/episode/6FG0xHkxfhSXEtbJbFbDF6 Margin Call Movie and Understanding Value at Risk https://open.spotify.com/episode/2XJ58KAoQKw2sdC48KHyPp Jay Pestrichelli's book Buy and Hedge https://amzn.to/3jQYgMt Derek's new book on public speaking Effortless Public Speaking https://amzn.to/3hL1Mag Derek Moore's book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547/ref=sr_1_1?keywords=broken+pie+chart&qid=1558722226&s=books&sr=1-1-catcorr Contact Derek [email protected] www.zegafinancial.com

Derek Moore and Jay Pestrichelli, CEO of ZEGA Financial, discussed the fallout in the markets during Jerome Powell's press conference post Fed decision. Then, they talk about high yield spreads and current interest rates across relative fixed income like investment grade, high yield, and treasuries. Finally, they explore how options are priced and which options are considered expensive or cheap vs one another. It might surprise you to take a step back looking at the per day costs. How options are priced using various inputs like implied volatility, interest rates, and time value. How Warren Buffett and Charlie Munger at Berkshire Hathaway have used options. Charlie Munger says Black Scholes is useless to price longer term options. Finally, some recommendations. The Federal Reserve has no action, but rates move higher. Rising long end of the yield curve Does the bond market finally believe the fed? Jerome Powell post press conference market selloff When all the high yield is due to be refinanced in the debt maturity wall. Looking at 0 DTE option with a half hour left compared to 3-day options. Comparing 0 DTE options all the way out to 5year+ options prices What is the per day cost of an option? Comparing longer vs shorter-term options from a cheap vs expensive standpoint How implied volatility currently is higher in much longer options. What implied volatility says about 1 standard deviation expectations for price? Cost of carry and interest rates in the pricing of options Constructing hypothetical option trades holding treasuries with long term calls Is Charlie Munger right that Black Scholes mispriced long term options? ISDA agreement Big Short Brownville Capital talking about mispriced long-term options. Warren Buffett talks about selling very long term options to get paid to have an option Mentioned in this Episode: 0DTE Options Analysis| Inflation Coming Back? | Strong US Dollar Impact https://podcasts.apple.com/us/podcast/0dte-options-analysis-inflation-coming-back-strong/id1432836154?i=1000628157831 Warren Buffett and Charlie Munger Berkshire Hathaway meeting discuss using and pricing options https://www.youtube.com/watch?v=SMkpou-YBGw Implied Volatility Deep Dive | Real Interest Rate Yields | The Big Short | Tesla vs Nvidia https://podcasts.apple.com/us/podcast/implied-volatility-deep-dive-real-interest-rate-yields/id1432836154?i=1000627400400 GameStop Short Squeeze by the Reddit Wall Street Bets Traders Explained https://podcasts.apple.com/us/podcast/broken-pie-chart/id1432836154?i=1000507187446 The Big Short Movie and Credit Default Swaps Explained https://open.spotify.com/episode/6FG0xHkxfhSXEtbJbFbDF6 Margin Call Movie and Understanding Value at Risk https://open.spotify.com/episode/2XJ58KAoQKw2sdC48KHyPp Recession Predictions Still Wrong? | Synthetic Options | Unemployment Anomalies | Oil Prices Breakout https://podcasts.apple.com/us/podcast/recession-predictions-still-wrong-synthetic-options/id1432836154?i=1000626691109 0 DTE Options No Problem? | Jay Powell's Wyoming Speech Points to More Interest Rate Hikes? https://podcasts.apple.com/us/podcast/0-dte-options-no-problem-jay-powells-wyoming-speech/id1432836154?i=1000625845803 Jay Pestrichelli's book Buy and Hedge https://amzn.to/3jQYgMt Derek's new book on public speaking Effortless Public Speaking https://amzn.to/3hL1Mag Derek Moore's book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547/ref=sr_1_1?keywords=broken+pie+chart&qid=1558722226&s=books&sr=1-1-catcorr Contact Derek [email protected] www.zegafinancial.com

Derek Moore and Jay Pestrichelli, CEO of ZEGA Financial, talk through the recent CBOE analysis on impact of 0DTE options. Contrary to popular belief, 0DTE options may not be causing imbalances according to the data. Plus, explaining how cash settled (European) style options differ from American style where you can be assigned (or auto exercised). How short puts can mirror covered calls. Not surprisingly, Jay and Derek get detailed into some of the similarities. Plus, is inflation coming back after the CPI report and the recent push higher in oil prices? How a strong US Dollar impacts companies and how the price of the new Apple iPhone is more expensive around the world. Finally, some recommendations and a Tim Tebow Johnny Manziel comparison. What CBOE (Chicago Board of Options Exchange) data says about 0DTE options Evaluating net buyers vs sellers of 0DTE options How CBOE data on 0DTE options seems to indicate more balance in positioning What is the difference between cash settled index options and American style options? How cash settlement differs from getting assigned or auto exercising into underlying shares Comparing the structure of covered calls with selling ITM in the money cash settled puts. Comparing risk of owning shares and selling covered calls vs selling cash secured puts How a strong US dollar impacts multinational corporation's earnings. Using the new Apple iPhone as an example of strong dollar impact to prices around the world Latest CPI (Consumer Price Index) came in hotter than expected. Is inflation making a comeback? How rising oil prices can impact inflation given its place in the CPI. Using the 1994-95 example of higher rates with a rising market Are people too worried about higher rates? Existing US mortgages are still primarily at much lower rates. Tim Tebow vs Johnny Manziel statistical comparison Mentioned in this Episode: Implied Volatility Deep Dive | Real Interest Rate Yields | The Big Short | Tesla vs Nvidia https://podcasts.apple.com/us/podcast/implied-volatility-deep-dive-real-interest-rate-yields/id1432836154?i=1000627400400 GameStop Short Squeeze by the Reddit Wall Street Bets Traders Explained https://podcasts.apple.com/us/podcast/broken-pie-chart/id1432836154?i=1000507187446 The Big Short Movie and Credit Default Swaps Explained https://open.spotify.com/episode/6FG0xHkxfhSXEtbJbFbDF6 Margin Call Movie and Understanding Value at Risk https://open.spotify.com/episode/2XJ58KAoQKw2sdC48KHyPp Recession Predictions Still Wrong? | Synthetic Options | Unemployment Anomalies | Oil Prices Breakout https://podcasts.apple.com/us/podcast/recession-predictions-still-wrong-synthetic-options/id1432836154?i=1000626691109 0 DTE Options No Problem? | Jay Powell's Wyoming Speech Points to More Interest Rate Hikes? https://podcasts.apple.com/us/podcast/0-dte-options-no-problem-jay-powells-wyoming-speech/id1432836154?i=1000625845803 Jay Pestrichelli's book Buy and Hedge https://amzn.to/3jQYgMt Derek's new book on public speaking Effortless Public Speaking https://amzn.to/3hL1Mag Derek Moore's book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547/ref=sr_1_1?keywords=broken+pie+chart&qid=1558722226&s=books&sr=1-1-catcorr Contact Derek [email protected] www.zegafinancial.com

Derek Moore is back with ZEGA CEO Jay Pestrichelli where they discuss whether higher real yields are an issue for markets and how this period seems similar to the 1990's. Then they dive into implied volatility using companies like Tesla TSLA and Nvidia NVDA as examples to explore how options markets express views on expected moves based on options prices. What are the drivers of volatility moving higher or lower. How earnings affect implied volatility and what typically happens after the announcement. They also have a side bar discussion comparing the debt of Tesla to Ford for no reason than that it's quite different. Finally, some recommendations. What is implied volatility? How to calculate implied price moves using implied volatility Comparing the implied volatilities of NVDA Nvidia vs TSLA Tesla as examples How implied volatility often rises and falls with earnings. How option prices bake in expectations The rule of 16 and implied volatility Stories about implied volatility rising around major events. Debt of Tesla vs Ford What is enterprise value? What are real yields? Real yields vs nominal yields Are higher real yields a problem for markets? 10-year real yield rising Comparing real yields today vs the 1990's bull market in equities Why investors should want positive real yields. GameStop armchair analysts in the end weren't right about the company. Upcoming GameStop movies and whether sensationalizing this hurts investors. Did the Big Short Movie cause investors to always be trying to bet on the next big thing? Mentioned in this Episode: GameStop Short Squeeze by the Reddit Wall Street Bets Traders Explained https://podcasts.apple.com/us/podcast/broken-pie-chart/id1432836154?i=1000507187446 The Big Short Movie and Credit Default Swaps Explained https://open.spotify.com/episode/6FG0xHkxfhSXEtbJbFbDF6 Margin Call Movie and Understanding Value at Risk https://open.spotify.com/episode/2XJ58KAoQKw2sdC48KHyPp Recession Predictions Still Wrong? | Synthetic Options | Unemployment Anomalies | Oil Prices Breakout https://podcasts.apple.com/us/podcast/recession-predictions-still-wrong-synthetic-options/id1432836154?i=1000626691109 0 DTE Options No Problem? | Jay Powell's Wyoming Speech Points to More Interest Rate Hikes? https://podcasts.apple.com/us/podcast/0-dte-options-no-problem-jay-powells-wyoming-speech/id1432836154?i=1000625845803 Jay Pestrichelli's book Buy and Hedge https://amzn.to/3jQYgMt Derek's new book on public speaking Effortless Public Speaking https://amzn.to/3hL1Mag Derek Moore's book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547/ref=sr_1_1?keywords=broken+pie+chart&qid=1558722226&s=books&sr=1-1-catcorr Contact Derek [email protected] www.zegafinancial.com

Derek Moore is joined once again by Jay Pestrichelli, CEO of ZEGA Financial where deep dive into the latest employment numbers. Plus, they ponder whether once everyone flips a recession finally comes? Later, they noticed some technical analysis on crude oil prices and a stealth rally. Then Jay and Derek talk through the idea of synthetic option positions including synthetic long stock and its attributes. Q2 earnings wrap up and how analysts over promised worse earnings and what's ahead. Unemployment BLS methodology deep dive The unemployment rate rises in August to 3.8% due to anomalies in the report. Yellow Trucking shutdown causes spike in transportation unemployment. Hollywood writers and actors' strikes cause unemployment rise. Labor force participation rate has been highest since Feb of 2020 25 to 54 age bracket labor force participation rate rises to highest since May of 2002 What are synthetic option positions? What is synthetic long stock using options? Mixed bag of economic data Everyone predicted wrong on recession. US Crude Oil inventories are declining. Q2 S&P 500 earnings wrap up. Q3 earnings and beyond preview How earnings predictions have declined over time Are we passed the trough in earnings? Why do people still hold money at large banks getting almost zero interest? What is a cup and handle technical pattern? Crude oil breaks out from cup with handle pattern. Mentioned in this Episode: 0 DTE Options No Problem? | Jay Powell's Wyoming Speech Points to More Interest Rate Hikes? https://podcasts.apple.com/us/podcast/0-dte-options-no-problem-jay-powells-wyoming-speech/id1432836154?i=1000625845803 EconPi website http://www.econpi.com/ Employment Numbers from the BLS https://www.bls.gov/ces/ Fed Funds CME probability tracker tool https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html Jay Pestrichelli's book Buy and Hedge https://amzn.to/3jQYgMt Derek's new book on public speaking Effortless Public Speaking https://amzn.to/3hL1Mag Derek Moore's book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547/ref=sr_1_1?keywords=broken+pie+chart&qid=1558722226&s=books&sr=1-1-catcorr Contact Derek [email protected] www.zegafinancial.com

Derek Moore is joined by Jay Pestrichelli, CEO of ZEGA Financial, to discuss the Bank of America piece saying maybe Goldman Sachs got 0 DTE option effects wrong. Plus, what did Jay Powell's speech mean if anything? New Fed Funds futures probabilities point to the Fed raising yet again. Then, they go through some odds and ends like how participation in employment surveys is dropping, the high Atlanta Fed GDP now numbers, and more. The Fed on track for more interest rate hikes? Jay Powell will do what needs to be done! Fed Funds futures probabilities What are 0 DTE Options? Bank of America says 0 DTE options were not the cause of a late-day market drop. Explaining how market makers hedge based on delta. Interest rates and the cost of carry in option prices Small discussion on what option Gamma is. Liquidity in the options market What is the Atlanta Fed GDP Now indicator? Surprising Q3 GDP Now reading over 5.7% What is the establishment employment survey? Dropping participation rate of the unemployment surveys Mentioned in this Episode: Bank of America Disputes Goldman Logic on Zero-Day Option Threat to Stocks https://finance.yahoo.com/news/bank-america-disputes-goldman-logic-185606310.html S&P 500 Forward PE Valuations vs Future Returns | Volatility in Stock & Option Markets https://podcasts.apple.com/us/podcast/s-p-500-forward-pe-valuations-vs-future-returns-volatility/id1432836154?i=1000624302870 Everyone Wrong on Interest Rates and what Fed Funds Probabilities Mean https://podcasts.apple.com/us/podcast/everyone-wrong-on-interest-rates-what-fed-funds-probabilities/id1432836154?i=1000625408660 Fed Funds CME probability tracker tool https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html Jay Pestrichelli's book Buy and Hedge https://amzn.to/3jQYgMt Derek's new book on public speaking Effortless Public Speaking https://amzn.to/3hL1Mag Derek Moore's book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547/ref=sr_1_1?keywords=broken+pie+chart&qid=1558722226&s=books&sr=1-1-catcorr Contact Derek [email protected]

Derek Moore discusses how everyone seemed to get the direction of rates across the yield curve wrong. How adding duration in hindsight was the wrong choice. Comparing market prognostications in 1995 to today. What the Fed Funds rate probabilities really measure. Plus, explaining why bonds make or lose money based it their duration (sensitivity to interest rates). The bond market got rates wrong. What is happening at the long end of the yield curve? Why doesn't the Fed have to lower rates without a recession or weakness. Explaining what "duration" means with bonds. How changes in interest rates make bonds go up or down. Comparison of 10 year and 30-today year treasury yields vs June 1st. Comparing yield curve today vs. 1995 What does the Fed Funds futures probability tracker measure? Explaining what the implied interest rate is from looking at futures prices. How Fed Funds futures are the markets' view TODAY of where rates might be in the future. How the Fed Funds futures market got interest rate trajectory wrong Mentioned in this Episode: S&P 500 Forward PE Valuations vs Future Returns | Volatility in Stock & Option Markets https://podcasts.apple.com/us/podcast/s-p-500-forward-pe-valuations-vs-future-returns-volatility/id1432836154?i=1000624302870 Liz Young's article showing current forward PE ratios and subsequent 10-year market annualized returns https://www.sofi.com/article/investment-strategy/liz-looks-at-wrong-calls/ Cheapest (SPX) PUT Protection You've Ever Seen? | S&P 500 Index Rebalancing | Bank of Japan Hawkishnesshttps://podcasts.apple.com/us/podcast/cheapest-spx-put-protection-youve-ever-seen-s-p-500/id1432836154?i=1000623047871 Fed Funds CME probability tracker tool https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html LA Times Jan 1995 article on stock and bond market views https://www.latimes.com/archives/la-xpm-1995-01-01-fi-15454-story.html Jay Pestrichelli's book Buy and Hedge https://amzn.to/3jQYgMt Derek's new book on public speaking Effortless Public Speaking https://amzn.to/3hL1Mag Derek Moore's book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547/ref=sr_1_1?keywords=broken+pie+chart&qid=1558722226&s=books&sr=1-1-catcorr Contact Derek [email protected]

Derek Moore and Jay Pestrichelli return this week to discuss what current forward PE rations and whether that informs future market returns. Reasons PE ratios may go up or down including earnings increasing or markets going lower. Have there been a jump in forward earnings expectations? Then they check in on the high yield spread against treasuries and relationship to the VIX Index. Later they discuss the moving average of the unemployment rate and whether that is leading or lagging as an indicator. Finally, before some recommendations, Jay and Derek take a win vs. the Fed when looking at the supply chain pressure index vs. the CPI. What is the Forward PE Ratio definition? What is the current forward pe on the S&P 500 Index? Is the forward pe ratio high in relation to the 25-year average? How markets falling or earnings rising can lower the forward PE ratio What is the high yield spread against treasuries? High Yield spread vs the VIX Index Global Supply Chain Pressure Index vs Consumer Price Index How inflation was a supply side issue Moving average of the unemployment rate as a leading indicator of recession? Do higher ranges of market intraday highs and lows mean anything? Next year's earnings estimates 2024 and 2025 S&P 500 earnings estimates Mentioned in this Episode: Liz Young's article showing current forward PE ratios and subsequent 10-year market annualized returns https://www.sofi.com/article/investment-strategy/liz-looks-at-wrong-calls/ US Debt Down Grade Effects | Interest Rates Effect on Option Prices | US Treasury Yield Curve Dis-inverting? | US Debt Massive Expansion https://podcasts.apple.com/us/podcast/us-debt-down-grade-effects-interest-rates-effect-on/id1432836154?i=1000623596920 Cheapest (SPX) PUT Protection You've Ever Seen? | S&P 500 Index Rebalancing | Bank of Japan Hawkishnesshttps://podcasts.apple.com/us/podcast/cheapest-spx-put-protection-youve-ever-seen-s-p-500/id1432836154?i=1000623047871 Jay Pestrichelli's book Buy and Hedge https://amzn.to/3jQYgMt Derek's new book on public speaking Effortless Public Speaking https://amzn.to/3hL1Mag Derek Moore's book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547/ref=sr_1_1?keywords=broken+pie+chart&qid=1558722226&s=books&sr=1-1-catcorr Contact Derek [email protected]

Derek Moore and Jay Pestrichelli are back at it discussing how higher interest rates have impacted the price of call and put options. They use some examples of what happens to options prices due to rates and dividends. Then they discuss the recent rise in long term treasury rates, the downgrade of US Treasury debt, and what if any effect the US Treasury issuing massive amounts of new treasury bonds into the market may have. Exploring the 36-month drawdown in the US Aggregate Bond Index compared to other periods. Finally, they check in on how the 3rd year of a presidential cycle is going and then move on to some recommendations. What effect do higher rates have on option premiums? How are dividends factored into the prices of options? Delving into examples of the value of cost of carry interest rates into call prices The longer end of the treasury curve includes 10 years to 20 years out. More supply of US Treasury bonds issued by the treasury causing higher rates due to increased supply. Best and worst market months historically during the 3rd year of the US Presidential cycle Size of net interest payments expected over the next year. US State and Local income tax receipts falling? How net interest debt payments are now larger than Social Security, Defense, and Medicare/Medicaid Does the US Debt downgrade matter? How sovereign debt is a relative game as many countries have growing debt to GDP. The US Aggregate Bond Index is still in 36 months and counting drawdown due to rising rates. Will the US treasury curve un-invert? Debating whether a curve reflating involves lower short rates or long rates rising? Bill Gross bearish on 10-year bonds believing curve may dis-invert by 10 year rising Mentioned in this Episode: Cheapest (SPX) PUT Protection You've Ever Seen? | S&P 500 Index Rebalancing | Bank of Japan Hawkishnesshttps://podcasts.apple.com/us/podcast/cheapest-spx-put-protection-youve-ever-seen-s-p-500/id1432836154?i=1000623047871 Does Inflation Matter? | Make More by Losing Less? | Volatility and Cost of Hedging | Someone Buys a lot of VIX Calls https://podcasts.apple.com/us/podcast/does-inflation-matter-make-more-by-losing-less-volatility/id1432836154?i=1000621261669 Jay Pestrichelli's book Buy and Hedge https://amzn.to/3jQYgMt Derek's new book on public speaking Effortless Public Speaking https://amzn.to/3hL1Mag Derek Moore's book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547/ref=sr_1_1?keywords=broken+pie+chart&qid=1558722226&s=books&sr=1-1-catcorr Contact Derek [email protected]

Derek Moore responds to a Bloomberg chart highlighting how cheap protective puts are right now according to Bank of America research. At least since 2008, and why it might be good to be hedged when it's cheap rather than waiting for a market crash to happen first. Then he explains some requirements for a stock to get included in the S&P 500 Index, when it regularly rebalances, and how relaxing the rules on multi share class stocks might pave the way for stocks like AirBnB to potentially be added to the S&P 500 Index at some point. Finally, while you were sleeping the Bank of Japan is going to loosen the cap on the JGP bonds to 1% and what that may mean if anything. The Bloomberg graph showing how cheap protective puts are on the S&P 500 Index right now. BofA points out 5% out of the money options are cheap and payoffs larger than they've been. Why being hedged all the time makes sense. How protection gets expensive when everyone "needs" it so why not be hedged when its cheap? S&P 500 Index rebalancing periods and what it means. NDX Nasdaq 100 special rebalancing to relieve too few stocks being too highly weighted. Requirement and restrictions on a company to be included in the S&P 500 Index S&P 500 Index relaxes rules on allowing companies with multi share classes into the index. Potential for Air BnB and Blackstone getting added to the S&P 500 Index Aspects of index membership changing no one ever talks about including aggregate earnings. Bank of Japan hawkish turn What is yield curve control by the Bank of Japan? Mentioned in this Episode: Why Crash Predictions Don't Help | What Does the Market Fear? | Confusing Market Data | 11th Best Start to the Year https://podcasts.apple.com/us/podcast/why-crash-predictions-dont-help-what-does-the-market/id1432836154?i=1000622056946 Does Inflation Matter? | Make More by Losing Less? | Volatility and Cost of Hedging | Someone Buys a lot of VIX Calls https://podcasts.apple.com/us/podcast/does-inflation-matter-make-more-by-losing-less-volatility/id1432836154?i=1000621261669 Short Sellers Give Up? | The Case for Interest Rates to Stay High for Longer https://podcasts.apple.com/us/podcast/short-sellers-give-up-the-case-for-interest-rates-to/id1432836154?i=1000620571083 Nasdaq 100 Index Strong First Half Equals Strong Second Half? | Overbought or not? | Trying to Guess the Forward PE Multiple Is Hard!https://podcasts.apple.com/us/podcast/nasdaq-100-index-strong-first-half-equals-strong-second/id1432836154?i=1000619186796 Jay Pestrichelli's book Buy and Hedge https://amzn.to/3jQYgMt Derek's new book on public speaking Effortless Public Speaking https://amzn.to/3hL1Mag Derek Moore's book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547/ref=sr_1_1?keywords=broken+pie+chart&qid=1558722226&s=books&sr=1-1-catcorr Contact Derek [email protected]

Jay Pestrichelli checks in with Derek Moore to discuss people that always predict horrible market crashes are coming and why it's so unhelpful for investors. Then they talk through what the market fears (besides the normal stuff) at this point including profit margins and looming strikes. Why is economic data so confusing and if its broken. Finally, they go through the S&P 500 having the 11th best 1st half and compare this market cycle to the 2000 bear market. Fear and market crash prediction do investors no good in the long run. What does the best 1st half market years tell us about the rest of the year's returns? S&P 500 Index has the 11th best first half of a year. Beyond inflation, what is left for the market to fear? How profit margins may be the next thing to watch The relationship between sales, margins, and earnings The economic data is all over the place. Leading economic indicators would seem to indicate recession, but other things are just fine. PPI minus CPI plotted against GAAP earnings over past years. What does PPI coming down greater than CPI tell us if anything? Surprising that the Dow Jones DIA ETF has a higher total return than SPY since inception. The number of workers on strike by year could hit some recent highs in 2023. What would large numbers of workers striking mean for the economy? Comparing 2000 bear market vs 2022 bear market Mentioned in this Episode: Does Inflation Matter? | Make More by Losing Less? | Volatility and Cost of Hedging | Someone Buys a lot of VIX Calls https://podcasts.apple.com/us/podcast/does-inflation-matter-make-more-by-losing-less-volatility/id1432836154?i=1000621261669 Short Sellers Give Up? | The Case for Interest Rates to Stay High for Longer https://podcasts.apple.com/us/podcast/short-sellers-give-up-the-case-for-interest-rates-to/id1432836154?i=1000620571083 Nasdaq 100 Index Strong First Half Equals Strong Second Half? | Overbought or not? | Trying to Guess the Forward PE Multiple Is Hard!https://podcasts.apple.com/us/podcast/nasdaq-100-index-strong-first-half-equals-strong-second/id1432836154?i=1000619186796 Jay Pestrichelli's book Buy and Hedge https://amzn.to/3jQYgMt Derek's new book on public speaking Effortless Public Speaking https://amzn.to/3hL1Mag Derek Moore's book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547/ref=sr_1_1?keywords=broken+pie+chart&qid=1558722226&s=books&sr=1-1-catcorr Contact Derek [email protected]

Derek Moore is joined once again by ZEGA Financial CEO Jay Pestrichelli to debate whether inflation still matters to the market. Plus, even though stocks like META are up huge off the bottom, they still are down from their prior highs. Why this shows the power of losing less through proper hedging and how it can potentially increase returns during volatile times. Speaking of volatility, they discuss the state of Vol in the markets including the VIX and why volatility isn't lower considering the market run. Finally, they illustrate the cost of hedging downside risk in individual stocks like Nvidia, Tesla, and more. Finally, before some recommendations, they showcase the report of a huge buy of VIX October calls. The CPI Consumer Price Index inflation report and ramifications Does inflation even matter to markets? META/Facebook is still down -20% from its 2021 high despite being up 250% off the bottom. How much you must make to overcome large losses. Cost of hedging annualized for individual stocks like Tesla and Nvida as examples. How to look at the cost of hedging So why isn't the VIX Index lower considering markets are at 1-year highs. Comparing short term VIX vs normal VIX levels Evaluating a big purchase of October VIX calls on the VIX future. VIX futures vs spot VIX (the one you see on CNBC) Mentioned in this Episode: Short Sellers Give Up? | The Case for Interest Rates to Stay High for Longer https://podcasts.apple.com/us/podcast/short-sellers-give-up-the-case-for-interest-rates-to/id1432836154?i=1000620571083 Nasdaq 100 Index Strong First Half Equals Strong Second Half? | Overbought or not? | Trying to Guess the Forward PE Multiple Is Hard!https://podcasts.apple.com/us/podcast/nasdaq-100-index-strong-first-half-equals-strong-second/id1432836154?i=1000619186796 Fear and Greed Index | Volatility Surface | Put Call Ratio | Wall Street Gets Bullish | Homebuilders Surprise https://podcasts.apple.com/us/podcast/fear-and-greed-index-volatility-surface-put-call/id1432836154?i=1000618362312 Jay Pestrichelli's book Buy and Hedge https://amzn.to/3jQYgMt Derek's new book on public speaking Effortless Public Speaking https://amzn.to/3hL1Mag Derek Moore's book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547/ref=sr_1_1?keywords=broken+pie+chart&qid=1558722226&s=books&sr=1-1-catcorr Contact Derek [email protected]

Derek Moore points out that no, the Fed doesn't need to lower rates without some problem or a recession. Looking at the nineties when markets went up despite Fed Funds rate above 5%. Then looking at the net short positions of traders via the commitment of traders report. It shows recently at markets moved higher, short sellers covered causing a short squeeze? Finally, before a recommendation, some talk about the upcoming earnings season and a reminder in 2022 earnings did not go below those of 2021 and the market still sold off due to multiple contraction. What is a short squeeze? What is the commitment of traders report? Bloomberg article pointing to bears (short positions) being closed the most since 2020. How short sellers closing positions add fuel to market rallies. Are large net short positions in the S&P 500 futures a good contrarian bullish signal? How earnings still grew in 2022 a little bit but markets still sold off due to multiple contraction. What is multiple contraction? Earnings season is coming up and expectations are for a down quarter. Comparing the Fed Funds rate in the nineties to today How markets went up even with rates above 5% in the 1995 to 2000 bull run What would make the Fed lower rates? Bloomberg article hints that with less short positions outstanding the short squeeze effect drops? Mentioned in this Episode: Bloomberg article on bears covering their short positions https://www.bloomberg.com/news/articles/2023-07-07/force-firing-up-the-stock-market-cools-off-with-shorts-conceding#xj4y7vzkg Nasdaq 100 Index Strong First Half Equals Strong Second Half? | Overbought or not? | Trying to Guess the Forward PE Multiple Is Hard!https://podcasts.apple.com/us/podcast/nasdaq-100-index-strong-first-half-equals-strong-second/id1432836154?i=1000619186796 Fear and Greed Index | Volatility Surface | Put Call Ratio | Wall Street Gets Bullish | Homebuilders Surprise https://podcasts.apple.com/us/podcast/fear-and-greed-index-volatility-surface-put-call/id1432836154?i=1000618362312 Jay Pestrichelli's book Buy and Hedge https://amzn.to/3jQYgMt Derek's new book on public speaking Effortless Public Speaking https://amzn.to/3hL1Mag Derek Moore's book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547/ref=sr_1_1?keywords=broken+pie+chart&qid=1558722226&s=books&sr=1-1-catcorr Contact Derek [email protected]

Derek Moore and ZEGA Financial CEO Jay Pestrichelli comment on Bloomberg's article showing the Nasdaq 100 Index just had its best 1st half since the early nineties. Is the market overbought or rightly valued and trending? Do investors who missed the rally say it's overbought because they need it to go back down? Looking at how markets do when they are up big in the first half of the year. Plus, Jay and Derek go back over some predictions from December to see how right or wrong they were. Finally, some quick thoughts on student loans from an economic standpoint. Some good recommendations. Bloomberg's article showing the Nasdaq 100 Index just had its best 1st half since the early nineties. Is the market overbought or rightly valued and trending? When markets have big first half historically how do they end the second half of the year? Do investors say markets are overbought because they missed out? Reviewing our predictions from December to now Student loan decision Looking at the cost of college from an economic standpoint Student loan payments start again in October and potential impact on GDP and inflation. You could nail next year's earnings but not the market multiple. What is the forward PE ratio? What were 2023 predictions on the S&P 500, Inflation, GDP, Gold, Bitcoin, Fed Funds and more Mentioned in this Episode: Fear and Greed Index | Volatility Surface | Put Call Ratio | Wall Street Gets Bullish | Homebuilders Surprise https://podcasts.apple.com/us/podcast/fear-and-greed-index-volatility-surface-put-call/id1432836154?i=1000618362312 Bear Market Rally or New Bull? |The Fed Talks Tough but Does Nothing | PE Like its 1995 https://podcasts.apple.com/us/podcast/bear-market-rally-or-new-bull-the-fed-talks-tough-but/id1432836154?i=1000617455261 Cheaper to Rent than Buy? | Beneish-M Score Near Market Highs? | Top 10 Market Cap Companies by Decade | VIX Level Makes Multiyear Low https://podcasts.apple.com/us/podcast/cheaper-to-rent-than-buy-beneish-m-score-near-market/id1432836154?i=1000615625441 Jay Pestrichelli's book Buy and Hedge https://amzn.to/3jQYgMt Derek's new book on public speaking Effortless Public Speaking https://amzn.to/3hL1Mag Derek Moore's book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547/ref=sr_1_1?keywords=broken+pie+chart&qid=1558722226&s=books&sr=1-1-catcorr Contact Derek [email protected]