Broken Pie Chart

Derek Moore and ZEGA Financial CEO Jay Pestrichelli talk about CNN's Fear and Greed Index and whether it's a good indicator for markets. Then they explore differences in Put Call Ratios and how they may not measure what people think. Plus, they look at the volatility surface across different option maturities noting how low near-term options implied volatilities have gotten indicating there is no fear. Once again, they comment on how the VIX is NOT broken! Later they discuss investment banks raising their year end S&P 500 targets now that markets are higher and how no one expected homebuilders to be up 43% from the October 2022 lows but they are. Finally, Jay and Derek comment on data comparing market performance in the first ½ hour, middle of the day, final hour, and buy and hold. Of course, they have a recommendation. CNN's Fear and Greed Index What goes into the Put Call Ratio How Option Open Interest changes depending on the transaction. Option open interest can be selling options to open or buying options to open. Wall Street investment banks raise their year-end S&P 500 targets. Bespoke chart showing S&P 500 returns held during different periods. Performance of S&P 500 in first ½ hour, middle of the day, final hour, and buy and hold. Surprise Strong performance by US Homebuilders up 43% since October 2022 lows Existing One Family Home Sales Median Price YoY change goes negative. The VIX isn't broken and how the CBOE has different VIX indexes for various time periods Mentioned in this Episode: 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 AI Driving Market Returns? | Size of Top 2 S&P 500 Stocks Now 15%? | Relative Performance of Tech vs S&P 500 Index at Extreme Levels https://podcasts.apple.com/us/podcast/ai-driving-market-returns-size-of-top-2-s-p-500/id1432836154?i=1000613885329 AI Is the New Crypto & Blockchain Post Nvidia Earnings | Reach for Long Duration Bonds | More Fed Rate Increases Coming? | 7% Treasury Bills? https://podcasts.apple.com/us/podcast/ai-is-the-new-crypto-blockchain-post-nvidia-earnings/id1432836154?i=1000614778019 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 is back with Derek Moore to discuss Jay Powell's tough talking but no action Fed. Plus, is this a repeat of the 1994-1995 forward PE expansion bull market? Also, they go back to the 200-2002 bear market where the Nasdaq 100 had 7 different 20% bear market rallies and the S&P 500 had its own share. Is this different? Finally, Jay and Derek look at instances where the S&P 500 made new highs with only 5% of the companies also making 52-week highs and the subsequent future historical returns. Off course some recommendations and they read a listener note. Why is 20% of the low a new bull market suddenly? New bull market or another bear market rally? The 1994-95 blueprint of markets rallying with forward PE expansion with rate hikes. Jay Powell and the Fed claim they are doing 2 more rate hikes? Tough talk by the Fed but they sit on their hands at the meeting. Why the Fed had nothing to do with taming inflation. PE multiple expansion responsible for the market rally. Fed may keep rates higher for longer. Does the Fed and inflation even matter anymore? Reviewing the 2000-2002 many failed greater than 20% bear market rallies Quantity theory of money PQ = MV The velocity of money and why quantitative easing doesn't always cause inflation Inflation dropping (caused by supply chain problems and government stimulus) not the Fed Mentioned in this Episode: BLS info showing auto dealership markups go way up https://www.bls.gov/opub/mlr/2023/article/automotive-dealerships-markups.htm 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 AI Driving Market Returns? | Size of Top 2 S&P 500 Stocks Now 15%? | Relative Performance of Tech vs S&P 500 Index at Extreme Levels https://podcasts.apple.com/us/podcast/ai-driving-market-returns-size-of-top-2-s-p-500/id1432836154?i=1000613885329 AI Is the New Crypto & Blockchain Post Nvidia Earnings | Reach for Long Duration Bonds | More Fed Rate Increases Coming? | 7% Treasury Bills? https://podcasts.apple.com/us/podcast/ai-is-the-new-crypto-blockchain-post-nvidia-earnings/id1432836154?i=1000614778019 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 Mike Puck from ZEGA Financial discuss how unlike what all the "experts" thought, international stocks have done quite well, and Europe's economy held up. They look back at how long US large cap has outperformed international developed country markets. Then they look at some sector flows and note the parabolic nature of the chart into the tech sector. Plus, they talk about US Equity Factors through very early June comparing growth, value, high beta, and low volatility performance. Finally, in a follow up to a previous episode's debate about car prices, Derek reads some reader emails and reviews the BLS data showing markups at dealerships are way up! Auto dealership markups go up big compared to the increase in cars themselves. US Equity Factors through early June High Beta vs Low Volatility names How international developed markets have lagged US large cap for years. Are there green shoots for developed international markets? What areas are included in developed international? Sector fund flows show tech gets a ton of new money flowing into it. What sectors have fallen out of favor looking at sector fund flows? Projections on some emerging economies share of middle class rising. Reading some reader email comments on car prices Mentioned in this Episode: BLS info showing auto dealership markups go way up https://www.bls.gov/opub/mlr/2023/article/automotive-dealerships-markups.htm 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 WSJ article M-Score Messod D. Beneish Accounting-Fraud Indicator Signals Coming Economic Trouble https://www.wsj.com/articles/accounting-fraud-indicator-signals-coming-economic-trouble-506568a0?mod=article_inline AI Driving Market Returns? | Size of Top 2 S&P 500 Stocks Now 15%? | Relative Performance of Tech vs S&P 500 Index at Extreme Levels https://podcasts.apple.com/us/podcast/ai-driving-market-returns-size-of-top-2-s-p-500/id1432836154?i=1000613885329 AI Is the New Crypto & Blockchain Post Nvidia Earnings | Reach for Long Duration Bonds | More Fed Rate Increases Coming? | 7% Treasury Bills? https://podcasts.apple.com/us/podcast/ai-is-the-new-crypto-blockchain-post-nvidia-earnings/id1432836154?i=1000614778019 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 explore data showing its cheaper to rent vs. buying a home in all but 3 markets. Then they bring up the WSJ article saying companies are "juicing" earnings evidenced by the Beneish-M score and historically whether a high M-score predated market tops. Later they look at how the top 10 market cap weighted companies have changed over the decades and why this supports buying indexes (but being hedged!). Finally, the VIX did something it hasn't done since….All this and more in this week's episode. Where is the homeownership premium the highest? Cheaper to rent vs own based on data from Redfin and Freddie Mac Comparing interest portion of mortgages to paying rent What is the Beneish M-score? Article by WSJ shows M-score is elevated at market peaks. A WSJ article says companies are using financial accounting to juice earnings. Top 10 largest by market cap companies in the S&P 500 index by decade What about top 10 by market cap companies in the world? The VIX now has a low not seen for several years. What is going on in the world of volatility? Equity market leadership shifts over time Are Apple, Microsoft and the rest of the FAAMG stocks an exception? Mentioned in this Episode: WSJ article Business Is Slowing. So Companies Are Juicing Profits https://www.wsj.com/articles/profit-numbers-get-spruced-up-as-business-slows-8eec5017 WSJ article M-Score Messod D. Beneish Accounting-Fraud Indicator Signals Coming Economic Trouble https://www.wsj.com/articles/accounting-fraud-indicator-signals-coming-economic-trouble-506568a0?mod=article_inline AI Driving Market Returns? | Size of Top 2 S&P 500 Stocks Now 15%? | Relative Performance of Tech vs S&P 500 Index at Extreme Levels https://podcasts.apple.com/us/podcast/ai-driving-market-returns-size-of-top-2-s-p-500/id1432836154?i=1000613885329 AI Is the New Crypto & Blockchain Post Nvidia Earnings | Reach for Long Duration Bonds | More Fed Rate Increases Coming? | 7% Treasury Bills? https://podcasts.apple.com/us/podcast/ai-is-the-new-crypto-blockchain-post-nvidia-earnings/id1432836154?i=1000614778019 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 have a lively discussion on whether AI is supplanting Crypto and Blockchain as the new thing. Then they point out fund flows going to long duration treasury (and 3x triple leveraged Treasury ETF) and why? Later we discussed the new increase in probabilities for more Fed interest rate hikes. Finally, Nvidia broke out after beating earnings and revenue expectations and a massive rise in expectations. Of course, they make some recommendations. AI is the new Crypto and Blockchain? Nvidia revenue guidance gets raised by a lot after beating estimates on earnings. Are there other instances where companies have added as much market cap in one day? Greater than 7% Treasury Bills Explaining why debt ceiling fears caused 6% and 7% very short-term treasuries. Nvidia's market cap gain in one day alone would equal the 35th largest S&P 500 Index company. Long Duration treasury ETFS including TLT and TMF see large inflows from investors. What are the risks of very long-dated treasury bonds? 3x Leveraged ETFs First 100 days market up >+7% so what happens to the rest of the year? Fed funds probability for interest rate rises or cuts. Probability now for at least one additional fed interest rate hike by markets Mentioned in this Episode: AI Driving Market Returns? | Size of Top 2 S&P 500 Stocks Now 15%? | Relative Performance of Tech vs S&P 500 Index at Extreme Levels https://podcasts.apple.com/us/podcast/ai-driving-market-returns-size-of-top-2-s-p-500/id1432836154?i=1000613885329 US Default Chances Overblown? | Option and Bond Markets Not Showing Fear https://podcasts.apple.com/us/podcast/us-default-chances-overblown-option-bond-markets-not/id1432836154?i=1000612967755 Dividend Deep Dive | ChatGPT AI Fed Research | Do Markets Go Up After Fed Pauses?https://podcasts.apple.com/us/podcast/dividend-deep-dive-chatgpt-ai-fed-research-do-markets/id1432836154?i=1000612068985 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 do it again. That's right they talk about AI but this time around how it may be driving Mega Cap Tech performance relative to the rest of the market. Plus, the weight of the top 2 S&P 500 companies is the highest since 1978 and the top 10 companies weighting is now 30%. They debate whether this is nothing or something. Finally, they discuss the LEI Leading Economic Indicator declining for 13 straight months without a "declared" recession yet. LEI Leading Economic Indicators Relative performance year to date between mega cap tech down the line to micro caps FAANMG forward PE ratios FAANMG = Facebook, Amazon, Apple, Netflix, Google, Microsoft. Carter Worth CNBC talks about relative tech performance at extreme levels. Top 2 companies at the highest weighting since 1978 Today its Apple | Microsoft but in 1978 its was AT&T and IBM Top ten companies in S&P 500 average weighting vs today ChatGPT time to reach 100 million users vs TikTok, Instagram, Google Translate, and Netflix Investors seem to be flowing into mega cap tech as an AI play. ChatGPT reached 100 million users in just 2 months. The Levis blue jeans (picks and shovels) approach to new tech? Mentioned in this Episode: Global X article explaining ChatGPT and regenerative AI https://www.globalxetfs.com/generative-ai-explained/ US Default Chances Overblown? | Option and Bond Markets Not Showing Fear https://podcasts.apple.com/us/podcast/us-default-chances-overblown-option-bond-markets-not/id1432836154?i=1000612967755 Dividend Deep Dive | ChatGPT AI Fed Research | Do Markets Go Up After Fed Pauses?https://podcasts.apple.com/us/podcast/dividend-deep-dive-chatgpt-ai-fed-research-do-markets/id1432836154?i=1000612068985 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 discuss whether the option markets via Volatility Indexes are underrating potential market turmoil. Plus, they debate whether fears of the US defaulting on Treasury Bonds is Overrated? Using ChatGPT AI to research the 1979 US Treasury default. Then they talk through what they are seeing in the options market including variances between implied volatility between different places on the volatility surface. Finally, before some recommendations, they discuss calls for banning of short selling on regional banks and why its not a great idea. Explaining implied volatility What the current volatility levels across the volatility surfaces is saying about market worries What the Bond volatility index is saying about markets Is it too quiet in markets or rightly quiet and the options markets know best? Are debt ceiling default fears overblown? Wouldn't the government prioritize interest on debt over other random expenses? The treasury is still collecting tax revenue each week, so don't they have money to pay debt? ChatGPT AI research on the 1979 technical treasury bond default Why did Treasury Bonds default in 1979? CDS (Credit Default Swap) rates on US Treasuries New talk on banning short selling on regional banks. What function does short selling provide to markets? Why banning short selling would cause option premiums to rise. Mentioned in this Episode: The Big Short Movie and Credit Default Swaps Explained https://open.spotify.com/episode/6FG0xHkxfhSXEtbJbFbDF6 Article detailing prior U.S. Defaults https://www.theglobalist.com/a-brief-history-of-u-s-defaults/ Margin Call Movie and Understanding Value at Risk https://open.spotify.com/episode/2XJ58KAoQKw2sdC48KHyPp Dividend Deep Dive | ChatGPT AI Fed Research | Do Markets Go Up After Fed Pauses?https://podcasts.apple.com/us/podcast/dividend-deep-dive-chatgpt-ai-fed-research-do-markets/id1432836154?i=1000612068985 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 is back on with Derek Moore where they do a deep dive into dividends. There are a lot of misconceptions around things like total return vs price return, ex-dates, payable dates, record date and more. Plus, they look at an example ETF before noting that there seems to be a movement of young investors focusing on dividend paying stocks to generate income. Finally, Jay and Derek talk about the Fed interest rate decision and even task ChatGPT AI to pull some research on what happens with markets once the Fed pauses. Oh, and Derek reconsiders whether ChatGPT is in fact a valuable service. ChatGPT AI Fed interest rate research Imagining ChatGPT AI with full access to investment return databases like S&P Global Are there instances where markets go down post a Fed pause? When did markets rise post Fed pause? Why would the Fed cut rates unless the economy is bad (or more bank failures)? Deep dive on dividends Total returns (including dividends) vs. price return. Explaining ex-dates, record date, payable dates for dividends Discussion of young investors gravitating towards a dividend portfolio strategy Dividend reinvestment income vs. reinvestment into more shares to compound Years to double examples of reinvesting dividends Converting annual dividend income to an hourly rate (Dividends Receive Annually / 2080) Mentioned in this Episode: Weird Bond Yield Stuff Happening | New 1 Day VIX Index? https://podcasts.apple.com/us/podcast/weird-bond-yield-stuff-happening-new-1-day-vix-index/id1432836154?i=1000610209621 Debt Ceiling Risk | Recession Signals | 10/3 Yield Curve Inversion Podcast https://podcasts.apple.com/us/podcast/debt-ceiling-risk-recession-signals-10-3-yield-curve/id1432836154?i=1000609174431 Can the Fed Fail? https://podcasts.apple.com/us/podcast/can-the-fed-fail-q1-winners-surprise-the-crowd/id1432836154?i=1000608060319 What are Reverse Repos and Repos? Fed usage of overnight reverse repos https://open.spotify.com/episode/09VOIffldtn3WxNm7rzyNx 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 poses some investment questions to ChatGPT, is it helpful? Instances where ChatGPT is wrong. Then, looking at the bulk of Q1 2023 earnings releases and what we've learned. Were analysts too bearish? Finally, Derek delves into the below the surface aspects of 1 month T-Bills yields so much less than 2- and 3-month T-Bills. Even less than the Fed Funds rate. Derek's theory is with the increase in cash flowing to money markets, and levels of Overnight Reverse Repos not increasing, the Occam's Razor answer is too little availability of near cash T-bills. ChatGPT as an investment advisor? Asking ChatGPT for some investment questions Is ChatGPT correct on stuff? 1-month US Treasury Bills yield much less than 3-month US Treasury Bills How historic is the difference between 1-month yields and 3-month yields? What does it mean if anything when 1-month T bills yield less than Fed Funds? Overnight Reverse Repo market used by the Fed as alternatives to near money T-bills. Compare the Reverse Repo interest rate to 1-month treasuries. Were analysts too bearish on Q1 2023 earnings? How analysts change their estimates over time Money Market funds have the highest level of assets all the way back to 2007. 20–30-year-olds should focus on increasing balances Why 20–30-year-olds spend too much time on optimizing returns Mentioned in this Episode: Weird Bond Yield Stuff Happening | New 1 Day VIX Index? https://podcasts.apple.com/us/podcast/weird-bond-yield-stuff-happening-new-1-day-vix-index/id1432836154?i=1000610209621 Debt Ceiling Risk | Recession Signals | 10/3 Yield Curve Inversion Podcast https://podcasts.apple.com/us/podcast/debt-ceiling-risk-recession-signals-10-3-yield-curve/id1432836154?i=1000609174431 Can the Fed Fail? https://podcasts.apple.com/us/podcast/can-the-fed-fail-q1-winners-surprise-the-crowd/id1432836154?i=1000608060319 What are Reverse Repos and Repos? Fed usage of overnight reverse repos https://open.spotify.com/episode/09VOIffldtn3WxNm7rzyNx 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 CEO Jay Pestrichelli are back again to discuss the CBOE launching a new 1 Day VIX Index and what it means in relation to the viability of the traditional VIX Index. Plus, they note that 1 month treasury bill yields are far below the 3 month which is odd when looking historically at the relationship. Hint, it has something to do with money market funds and the Fed Overnight Reverse Repos. Then they discuss the decline in the money supply but when put into context, is it really a big deal? Finally, they dish out some recommendations. 1-month US Treasury Bills yield much less than 3-month US Treasury Bills How historic is the difference between 1-month yields and 3-month yields? What does it mean if anything when 1-month T bills yield less than Fed Funds? CBOE launches a new 1 Day VIX Index Is the traditional VIX Index broken? Differences between various VIX index terms and what they tell us. What is the VVIX Index? What does the VVIX Index tell us about option prices on the VIX? Current shape of the VIX Futures expiration curve Relationship between spot VIX (what you see on TV) and the VIX Futures Flows into money market funds continue but from where? Overnight Reverse Repos from the Fed as a competitor to 1-month treasury bills Mentioned in this Episode: Debt Ceiling Risk | Recession Signals | 10/3 Yield Curve Inversion Podcast https://podcasts.apple.com/us/podcast/debt-ceiling-risk-recession-signals-10-3-yield-curve/id1432836154?i=1000609174431 Can the Fed Fail? https://podcasts.apple.com/us/podcast/can-the-fed-fail-q1-winners-surprise-the-crowd/id1432836154?i=1000608060319 What are Reverse Repos and Repos? Fed usage of overnight reverse repos https://open.spotify.com/episode/09VOIffldtn3WxNm7rzyNx 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 CEO Jay Pestrichelli are back again to discuss Cam Harvey's 10/3 Yield Curve Inversion and its track record. What it has meant and can mean going forward. Looking at the Real Retail Sales importance for predicting recessions. What various Fed members and Jamie Dimon say about where interest rates are going. Plus, what is going on with wages and how real wage growth may or may not give the Fed cover to raise more. Then, they discuss banks going to the discount window and the new Bank Term Funding Program (BTFP) to borrow money. Finally, what do credit card interest rates and increased usage tell us about the health of the consumer, and why is no one talking about the upcoming debt ceiling deadline? What is the 10-year 3-month yield curve inversion? Cam Harvey and the inception of the 10/3 yield curve as a predictor How often has the 10/3 yield curve inversion predicted recessions? Does the steepness of the yield curve say anything about the depth of recessions? Debating whether the 10/3 inversion in 2019 predicted the 2020 recession? Average time from yield curve inversion to the declaration of recessions Cam Harvey interview saying this time might be different. How real retail sales peaked back in March of 2021 Nominal retail sales disappointed while year over year hit lowest level in a while. What is the Bank Term Funding Program (BTFP)? Banks accessing the Fed's discount window plus the BTFP Consumer credit usage makes a new high while credit card interest rates reach new high Jamie Dimon comments on higher rates for longer and implications Real wage growth has been negative for the last 2 years What is the debt ceiling and what does it mean for the US Treasury US Treasury keeps a "checking" account at the Fed Mentioned in this Episode: Atlantic article from 2011 explaining potential option to get around debt ceiling by US Treasury getting overdraft protection from the Fed https://www.theatlantic.com/business/archive/2011/07/the-us-government-cannot-ever-run-out-of-money/242622/ Can the Fed Fail? Q1 Winners Surprise the Crowd podcast https://podcasts.apple.com/us/podcast/can-the-fed-fail-q1-winners-surprise-the-crowd/id1432836154?i=1000608060319 One Thing No One Ever Talks About within the S&P 500 Index | FANG Stocks 1 Rest of Market 0 https://podcasts.apple.com/us/podcast/one-thing-no-one-ever-talks-about-within-the-s-p-500/id1432836154?i=1000607742682 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's Mike Puck are paired once again to talk about markets and the economy. They discussed how Q1 asset class winners and losers weren't what many thought coming into the quarter. They also talk about correlations, or how different asset classes and sectors have been more correlated over the last 12 months and what that means for portfolios. The lack of high yield debt coming due and how that keeps company's interest costs down given they refinanced already. Finally, they check in with the Fed and how much of an IOU they owe the US Treasury. The Fed can't fail, can it? How correlations go to 1 when things get bad If correlations go to 1, what does that mean for diversification? Comparing 12-month correlations between stocks, bonds, commodities, and other factors What do the current 12-month trailing PE ratios tell us if anything? When do most high yield bonds and loans mature? How companies locked in lower rates and what that means for interest coverage ratios Using Netflix as an example by looking at their weighted average yield on their debt What is the Federal Reserve Deferred Assets to the US Treasury? Why is the fed running an IOU to the US Treasury? When did the fed go from paying out excess interest to the treasury to owing a deferred asset? Can the Federal Reserve fail? How bad are the Fed's unrealized losses on their own balance sheet at the end of 2022? The Fed isn't like commercial banks. Mentioned in this Episode: Fed Tightening and Easing all at once? https://podcasts.apple.com/us/podcast/fed-tightening-and-easing-all-at-once-how-wrong-were/id1432836154?i=1000605934758 What are Zombie Companies https://open.spotify.com/episode/3j2jm6hbS981GZGhIQn5X3 Is Warren Buffett right on stock buybacks? https://podcasts.apple.com/us/podcast/is-warren-buffett-right-on-stock-buybacks-bank-failures/id1432836154?i=1000604780531 Podcast Explaining Overnight Reverse Repos ON RRP by the FED https://open.spotify.com/episode/09VOIffldtn3WxNm7rzyNx How Senior Loans work with Dan McMullen https://podcasts.apple.com/us/podcast/dan-mcmullen-talks-senior-loans-leveraged-loans-clos/id1432836154?i=1000527737992 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 CEO Jay Pestrichelli are back together to debate the dollar, markets, earnings, and more. Plus, they discuss one aspect of S&P 500 Index estimates that no one ever talks about. Then, MSFT, META, AAPL, GOOGL, and AMZN have driven all the YTD gains in the S&P 500 Index compared to the rest of the market. Finally, they discuss whether the market is still keying off the US Dollar level, S&P 500 profit margins, and more. US Dollar still wagging the tail of the stock market? Correlations of US Dollar to Equities (S&P 500 Index) S&P 500 Index profit margins come off record highs. What would declining profit margins mean for earnings? Historical growth of S&P 500 Index revenues What no one ever talks about within the S&P 500 Index S&P 500 Index constituent changes – out with the old in with the new What does the S&P 500 Index divisor mean relative to S&P 500 Index total market cap? 2022 negative EPS on S&P 500 Index driven by multiple and margin contraction. EPS growth through margins, revenue, and share count. Silicon Valley Bank and Signature bank get boot from S&P 500 Index Quarterly rebalancing of S&P 500 Index 5 Fang stocks drive YTD performance of the S&P 500 Index What annualized return needed to make a new high in the S&P 500 Index Mentioned in this Episode: Fed Tightening and Easing all at once? https://podcasts.apple.com/us/podcast/fed-tightening-and-easing-all-at-once-how-wrong-were/id1432836154?i=1000605934758 Sequence of recessions and what comes first https://podcasts.apple.com/us/podcast/sequence-of-recessions-slowdowns-dividends-make/id1432836154?i=1000603802075 Is Warren Buffett right on stock buybacks? https://podcasts.apple.com/us/podcast/is-warren-buffett-right-on-stock-buybacks-bank-failures/id1432836154?i=1000604780531 Podcast Explaining Overnight Reverse Repos ON RRP by the FED https://open.spotify.com/episode/09VOIffldtn3WxNm7rzyNx 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]

ZEGA CEO Jay Pestrichelli rejoins Derek Moore to talk Jay Powell and the Fed seemingly tightening and loosening all at once. They raised rates, but then increased the size of their balance sheet through the SVB (and other) bank bailouts. Then, observing the deep discounts, some REIT etfs are currently trading to NAV and what that infers. Also, Hindenburg research (a short seller) put out negative research on Block (Square). The role of short-selling firms and noting the high stock-based compensation impact on non-GAAP earnings in Block. Finally, Jay and Derek discuss the changes to sector classifications and the impact on financials, how bad a year 2022 was for both stocks and bonds together, and how earnings estimates look going forward and how far off analysts were last year. Of course, they'll have some recommendations. 2023 Q1 earnings estimates on the S&P 500 Index companies How the analysts brought down earnings estimates How off analysts were from their early estimates to actual earnings Hindenburg negative Block (Square) piece before they sold short SBC or Stock Based Compensation impact on GAAP earnings vs adjusted earnings Real Estate REITs seem to be trading below their NAV, are they ahead of the game? Goldman Sachs points out tightening financial conditions are a quasi-25-50 bps raise How the bank crisis may make lending standards tighter Will financials have a headwind on earnings due to tightening credit conditions? Fed balance sheet balloons up after bailouts of banks GICS sector re-classification by moving companies like Visa and Mastercard to financials They discuss whether sector re-classifications in many companies were the right fit Berkshire Hathaway holds Apple and other non-financials but are the highest weighted in XLF What the earnings outlook shows for first quarter through the end of 2023 How far off analysts were when looking at their projections for Q4 22 a year out How much analysts estimates for sectors and the S&P 500 earnings change over time QT Quantitative Tightening and QE Quantitative Easing all at the same time? Treasury Secretary Janet Yellen confusing answers to congress on bank bailouts Did the Fed need to raise 25 bps to keep its credibility? Mentioned in this Episode: Sequence of recessions and what comes first https://podcasts.apple.com/us/podcast/sequence-of-recessions-slowdowns-dividends-make/id1432836154?i=1000603802075 US Debt Bomb and Growing Interest Rates effects on US Federal Deficit and Budget https://podcasts.apple.com/us/podcast/us-debt-bomb-interest-rates-brewing-auto-loan-problem/id1432836154?i=1000602839094 Bloomberg Odd Lots Podcast deep dive into state of commercial real estate and loans https://podcasts.apple.com/us/podcast/where-stress-is-showing-in-the-%2420-trillion/id1056200096?i=1000604934309 Podcast Explaining Overnight Reverse Repos ON RRP by the FED https://open.spotify.com/episode/09VOIffldtn3WxNm7rzyNx 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 back with Mick Puck to discuss the Warren Buffett quote excoriating opponents to share buybacks. Why buybacks and dividends are more closely related than you think. Using Walmart to explain how the change in shares outstanding affect EPS. Where to see share repurchases and dividends on a company's cash flow statement. Plus, our quick overview of the Silicon Valley Bank (SVB) debacle and what the FDIC's list of troubled banks at the end of 2022 told as (if anything) about the 3 banks that failed the last 2 weeks. SVB Silicon Valley bank example of duration risk in bonds (mortgage-backed securities) How MBS mortgage-backed bonds see duration sensitivity to interest rates rise as rates rise Where to find the FDIC quarterly report on banks including their watch list and amounts Warren Buffett statement on how share buybacks are misunderstood. Do companies always buy back shares when their stock is undervalued? Where to find on cash flow statement share repurchases and issuance Where to find on cash flow statement dividends paid out Explaining the difference between a buyback yield and dividend yield How much did Apple repurchase through buybacks last year vs dividends Walmart as an example showing how reduction in outstanding shares effects earnings per share Comparing capital gains on shares to dividends for normal investors and their preferences How buybacks are more flexible for dividends Do buybacks show confidence in one's own shares for companies? Positives and negatives for buybacks including stock based compensation and dilution Finally, some recommendations on a movie and a TV show Mentioned in this Episode: FDIC watch list of troubled banks and quarterly bank profile graphs https://www.fdic.gov/analysis/quarterly-banking-profile/graph-book/2022dec/ Sequence of recessions and what comes first https://podcasts.apple.com/us/podcast/sequence-of-recessions-slowdowns-dividends-make/id1432836154?i=1000603802075 US Debt Bomb and Growing Interest Rates effects on US Federal Deficit and Budget https://podcasts.apple.com/us/podcast/us-debt-bomb-interest-rates-brewing-auto-loan-problem/id1432836154?i=1000602839094 Underperformance of International Stocks https://podcasts.apple.com/us/podcast/underperformance-of-international-stocks-valuations/id1432836154?i=1000601650028 Wharton Magazine article Beware of High Dividends https://magazine.wharton.upenn.edu/digital/beware-high-dividend-yield-stocks/ Reuters article showing Discount Window picked up towards the end of 2022 https://www.reuters.com/markets/us/fed-discount-window-borrowing-is-edging-up-is-it-problem-2022-12-09/ 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, CEO of ZEGA Financial, joins Derek Moore again to discuss markets going higher even when earnings decline post bear markets. Plus, they discuss Michael Kantro's HOPE graph showing the order of slowing in the economy through the lens of Housing, New Orders, Profits, and Employment. Then they move on to the drivers of returns talking through PE multiples, margins, revenues, buybacks, and dividends. Speaking of dividends, are they going to be the next big thing if investors believe markets may trade flat for a while? Finally, Jay and Derek give some recommendations that may or may not be good. Percentage of total stock returns dividends historically make up Examining prior 1 year forward stock returns after bear market low is in vs. earnings declines HOPE or Housing, Orders, Profits, Employment, and typical cycles from slowdown to expansion How dividends plus premium (covered call) selling may augment returns in flat markets Where market returns come from How changing margins, PE multiples, share buybacks, and revenues determine returns Examining where returns came from in other decades and where we stand now Will dividends be the next hot investment area funds flow to? Number of new highs in markets by year Number of greater than >1% down days in the S&P 500 Index How much the Fed Funds futures implied interest rate has changed by a wide amount Being hedged vs a dividend strategy Mentioned in this Episode: US Debt Bomb and Growing Interest Rates effects on US Federal Deficit and Budget https://podcasts.apple.com/us/podcast/us-debt-bomb-interest-rates-brewing-auto-loan-problem/id1432836154?i=1000602839094 Underperformance of International Stocks https://podcasts.apple.com/us/podcast/underperformance-of-international-stocks-valuations/id1432836154?i=1000601650028 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, CEO of ZEGA Financial, joins Derek Moore again to discuss whether this current bear market is tracing the 2000/2001 bear market. Plus, they highlight how tight yield spreads are looking at what the 3-month treasury bill/ 2-year treasury note are yielding compared to high yield and investment grade bonds. Then Jay and Derek go through the looming US debt bomb in regard to where interest payments might go and whether there will be political pressure for the Fed to keep rates low. Finally, after going through the avocado vs bitcoin relationship, they give a few recommendations. The US Federal Debt is growing but what if rates stay higher and net interest owed goes up? What does the yield spread tell us about relationships of corporate bonds to treasuries? Is the current bear market tracking the 2000-2001 bear market? Does the price of Bitcoin and Avocados really track one another? Tom Lee points to breakouts in Nasdaq stocks Tom Lee Ex-FAANG forward PE ratios for the S&P 500 Index US Federal Debt held by the public Nominal GDP Growth vs US 10 Year Treasury Yield Looking at John Hussman regression chart on 10-year trailing growth vs nominal GDP US government spending next 10 years at WWII levels Current net interest payments by US government Average car price in the US hit new highs in 2022 while interest rates rising Negative equity on used cars getting rolled into new car loans Most home owners locked in really low interest rates Corporations interest costs as percent of cash flows low because they locked in low bond rates Comparing 3-Month Treasury Yields spread to high yield and investment grade bonds Car loans are getting too long considering cars are a depreciating asset Mentioned in this Episode: Underperformance of International stocks for a long time and valuations still too high? https://podcasts.apple.com/us/podcast/underperformance-of-international-stocks-valuations/id1432836154?i=1000601650028 No Volmageddon 2.0 | No Landing for the Economy? https://podcasts.apple.com/us/podcast/no-volmageddon-2-0-no-landing-for-the-economy/id1432836154?i=1000600413796 2019 WSJ article on car owners rolling negative equity on long term car loans into their next car https://www.wsj.com/articles/the-seven-year-auto-loan-americas-middle-class-cant-afford-their-cars-11569941215 Nominal (not inflation adjusted) US GDP https://fred.stlouisfed.org/series/GDP Federal government current expenditures net interest payments on debt https://fred.stlouisfed.org/series/A091RC1Q027SBEA Words and Numbers Podcast where they talk about tax receipts (what government takes in) have gone up 50%+ since 2020 https://open.spotify.com/episode/2zjC18iPqIm0LUeDPF2nAP?si=o2wX9sn8SB25BMSMrk2xzw 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 back with Mike Puck, Director of Business Development at ZEGA Financial to talk underperformance of international stocks and how "everyone" is saying this is the year that trend gets reversed. Mike shares what people were talking about at the Miami ETF Conference around flows into international funds to start the year. Plus, they talk about what investors give up if they rotate out of S&P 500 US type investments and how you might already have international exposure in large US companies. Finally, they discuss the consensus for the US Dollar to drop in 2023 along with some other odds and ends within markets and the economy. Why we don't try and pick markets and instead just Buy and Hedge! Comparing the performance of international stocks and value stocks Relative underperformance for over a decade in international stocks Is 2023 the year international finally outperforms again? Spain's IBEX Index price (not including dividends) is the same as it was in 1997-98 Makeup of stocks within the S&P 500 Index vs some international indexes Looking at the top 100 companies worldwide by market cap John Hussman Price/Sales ratio chart Price to sales still higher than average – although margins remain higher than average Market may be assuming net profit margins will stay elevated Google searches for Soft Landing are up Comparing the Nominal GDP growth to the 10-Year Treasury yield Early 90s Emerging Markets dominance International stock indexes have less technology and more value type stocks Mentioned in this Episode: No Volmageddon 2.0 | No Landing for the Economy? https://podcasts.apple.com/us/podcast/no-volmageddon-2-0-no-landing-for-the-economy/id1432836154?i=1000600413796 John Hussman article on current valuations https://www.hussmanfunds.com/comment/mc230221/ 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 back with ZEGA Financial CEO Jay Pestrichelli to discuss recent discussion on 0 DTE (zero days to expiration) options and potential for a new Volmageddon event due to them. Then, they again get into The Fed and the idea of hard landing, soft landing, or no landing (that's a new one). Plus, they discuss some odds and ends within markets and the economy including some chart crimes, shipping container rates, next 12 month returns ONCE a bear market bottom is in, and why US Investment Grade Bonds are yielding less than the 3-month treasury bond at higher percentages than before. Volmageddon 2.0 (or Volpocalypse 2.0) What are 0 DTE Zero Days to Expiration Options Why we now see much more trading in 0 DTE Options Why 0 DTE options aren't that big of a deal What is a No Landing Economy scenario? Why the Fed might revert back to the 90s on interest rates If the economy is growing why do rates need to fall? The idea of the Fed keeping dry powder just in case Non-voting Fed members are making a lot of noise about rates IF the bear market low is in (and that's still an if) forward 12 month returns positive Shipping container rates including the Rotterdam to New York down 80% off highs Examples of 2011 expiration of SPY options available versus now (hint a lot more now) Comparing treasury yield curves over select periods Bankruptcies and 90-day credit card delinquencies are up (do these lack perspective?) Mentioned in this Episode: Jay and Derek's prior episode 'Now Everyone is Bullish? | Shocking Impact of Missing Just the 2 Best Days Each Year' https://podcasts.apple.com/us/podcast/now-everyone-is-bullish-shocking-impact-of-missing/id1432836154?i=1000599235040 Bloomberg: JP Morgan's Kolanovic Warns of Volmageddon 2.0' risk in Options https://www.bloomberg.com/news/articles/2023-02-15/jpmorgan-strategist-kolanovic-warns-of-volmageddon-2-0-risk-in-options-market 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 back with ZEGA Financial CEO Jay Pestrichelli to discuss how AFTER the market ran up in January people are bullish according to the new AAII Individual Investor survey. Plus, updated numbers on the difference in hypothetical returns if you missed ONLY the 2 best day each year over a 10 or 20-year period. Then, we continue to get economic data that is telling different stories so what to believe? Then they give some recommendations. AAII Sentiment Poll Bulls minus Bears turns positive after 44 consecutive weeks bearish. NAAIM Exposure Index (Active Manager Equity Exposure) most bullish since Jan 2022 Shocking difference in returns when taking out 2 best market days over 10 and 20 years Worst 20 year rolling return was still positive Atlanta Wage Growth tracker shows wage growth still strong Difference between job switchers and job stayers still wide (make more switching) Leisure and Hospitality wages still surging to new highs Since WWII markets have taken off 7 months post inflation peaks on average Inventories in durable goods and lumber (and other construction materials) move higher Fed governors talk tough and market implied fed funds rate surges higher People are spending down the post-Covid excess savings Mentioned in this Episode: Personal Savings https://fred.stlouisfed.org/series/PSAVE Wage growth tracker https://www.atlantafed.org/chcs/wage-growth-tracker 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 back to talk about the one thing no one seems to think is a possibility with interest rates. Plus, why the tightening of the triple BBB corporate bond spreads above 3-month Treasury Bills and Fed Funds is something to watch for markets. Then, Derek explains the 4 stock market scenarios people are watching. Disconnect between market expectations and the Fed Spread between corporate bonds and treasuries narrows BBB Corporate bond spread to Fed Funds smallest since 2007 What do interest rate spreads mean? How are interest rate spreads calculated? What happens when spreads widen or narrow in bonds and stocks? What are Overnight Reverse Repos Fed Funds ranges vs exact rate What is the effective fed funds rate Where to find the fed funds rate CME Fed Interest Rate probability tool The federal reserve dot plots Mentioned in this Episode: What are Overnight Reverse Repos ON RRP that Fed is using nowhttps://open.spotify.com/episode/09VOIffldtn3WxNm7rzyNx Effective Fed Funds Rate https://www.newyorkfed.org/markets/reference-rates/effr See Probabilities of future Fed Funds hikes or lowering https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html The triple BBB bond spread https://fred.stlouisfed.org/series/BAMLC0A4CBBB Wall Street Journal banks predict recession and Fed Pivot in 2023 https://www.wsj.com/articles/big-banks-predict-recession-fed-pivot-in-2023-11672618563 Prof Aswath Damodaran market scenarios post https://aswathdamodaran.blogspot.com/2023/01/data-update-2-for-2023-rocky-year-for.html 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 Mike Puck discuss the upcoming Fed meeting and whether rates will stick around at higher levels for a while despite general estimates for lower rates in the back half of 2023 and early 2024. Mixed signals in the labor market as tech announces layoffs while other companies point to hiring. Why it's tough to pick individual stocks using Tesla as an example. Does the Fed still want bad things to happen in the economy? Watch the Fed press conference Tech stocks see gains after layoff announcements Why picking individual stocks is so hard Tesla record earnings and revenues but 2022 was a bad year for its stock price Bull market in Orange Juice? LEI Leading Economic Indicators flashing recession signal Strong Q4 GDP but interesting durable goods transportation contribution Fed Funds futures don't believe the Fed will keep interest rates high Would it be so bad if we got to 4.8% Fed Funds and stayed there? Why markets don't like rate uncertainty Q4 earnings look to be below the prior year Accuracy of the Atlanta Fed GDP Nowcast Model NFIB Small Business survey not so rosy? Jeremy Siegel the eternal optimist So is good news "good news" again? Mentioned in this Episode: Earnings declines don't always mean stock market declines https://podcasts.apple.com/us/podcast/max-bearish-earnings-declines-dont-mean-falling-stocks/id1432836154?i=1000596061448 1994-95 all over again for stock market? https://podcasts.apple.com/us/podcast/1994-95-all-over-again-in-markets/id1432836154?i=1000590865306 ZEGA Financial https://zegafinancial.com/ 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

Jay Pestrichelli, CEO of ZEGA Financial and Derek Moore are back to talk Netflix earnings, why earnings declines don't necessarily mean falling stock prices, wide bid ask spread in housing, and volatility dropping in the currency and fixed income markets. Plus, the AAII investor survey points to record lows in bullish sentiment. Why margins are being overlooked in earnings estimates. Finally, is Japan an unknown, unknown and Derek (without any knowledge) predicts Amazon buys AMC and Apple buys Netflix. Does the market still care about Netflix earnings? Netflix low YoY quarterly revenue growth Wild prediction on Apple buying Netflix Why doesn't Amazon buy AMC? Existing home sales continue to make new lows year over year Earnings declines don't equal lower stock prices all the time Comparing years where earnings are lower but stocks are higher Why markets look forward to future earnings expectations Volatility dropping in FX and fixed income markets Spread between equity volatility and Fixed Income volatility still wide Used car prices finally printing lower lows AAII survey points to low bullish sentiment and high bearish sentiment Margins in earnings should be the story Why Japan may be a thing to watch as an unknown unknown Mentioned in this Episode: 2023 market predictions that will probably be wrong again https://podcasts.apple.com/us/podcast/2023-predictions-markets-and-the-economy/id1432836154?i=1000591390337 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 Jay Pestrichelli's book Buy and Hedge https://www.amazon.com/Buy-Hedge-Iron-Rules-Investing/dp/1087941849/ref=nav_signin?_encoding=UTF8&qid=&sr=&asin=1087941849&revisionId=&format=4&depth=1 Contact Derek [email protected]

Derek and Mike Puck, ZEGA Director of Business Development, discuss whether Value will have a period of outperforming Growth. How Value and Growth have experienced long regimes where one outperforms another. Where we are in the current cycle. Plus, how dividends historically have accounted for 40% of total returns in the S&P 500 Index. What makes a stock a "value stock"? Growth vs Value historically How growth has outperformed value for extended period of time Are we about to switch where value outperforms growth? How value investors have been fooled in the past How older companies reap the benefits of technology. Different types of assets and do they get missed with Growth stocks? Dividends have accounted for 40% of S&P 500 index total returns historically. Dividends over last few decades less than buybacks as percentage of net income Idea of strategy that has dividends Plus option premium from covered calls. Goals of covered call strategies Concept of dogs of the Dow How dividend yields move higher as price moves lower (so long as they keep paying dividends) Mentioned in this Episode: Chart showing Growth vs Value relative performance historically https://www.hartfordfunds.com/dam/en/docs/pub/whitepapers/CCWP105.pdf Dividends as percentage of total returns historically S&P 500 Index https://www.hartfordfunds.com/insights/market-perspectives/equity/the-power-of-dividends.html 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, CEO of ZEGA Financial and Derek are back to talk about how there is conflicting bullish and bearish data in the economy. Jobs data vs manufacturing tells a different story. Plus, digging into the labor force participation rate conundrum. This week Campbell Harvey who came up with the 3 month over 10 year treasury yield curve inversion indicator said despite being right every time on recessions, this time may be different. Cambell Harvey yield curve inversion signals false this time? 3 Month Treasury inverted against the 10 Year Treasury Bond Labor force participation rate explained. Is low unemployment rate because a few million people are not looking for work? PMI data shows things are slowing while employment is strong. Wage growth revised lower a bullish sign for markets? Has Spain's stock market really gone nowhere for past 13 years? It's about to get real for earnings seasons once again. Banks are first up for earnings which may give hints around the economy Don't overlook Taiwan Semiconductor earnings as an econ barometer for economy. And recommendations for a few movies, shows, and books. Mentioned in this Episode: Yield curve inversion false signal this time according to Cambell Harvey? https://finance.yahoo.com/finance/news/pioneering-yield-curve-economist-sees-151304568.html 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 Jay Pestrichelli's book Buy and Hedge https://www.amazon.com/Buy-Hedge-Iron-Rules-Investing/dp/1087941849/ref=nav_signin?_encoding=UTF8&qid=&sr=&asin=1087941849&revisionId=&format=4&depth=1 Contact Derek [email protected]

Derek is back with the first show of 2023. On this week's episode, looking at successive negative market years frequency and returns by decade. Hint, we're still positive decade to date by more than you think. Plus, examining frequency of T bills outperforming the S&P 500 Index. Review S&P 500 Index market returns by decade How frequent do markets have succussive down years? How can T-bills outperform the S&P 500 Index? Decade to date is still positive by more than people think. How markets have been good (outside of 2022) Looking at markets over longer horizons Mentioned in this Episode: 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 John Hussman article on markets showing when T-bills outperform equity markets https://www.hussmanfunds.com/comment/mc190906/ Contact Derek [email protected]

Jay Pestrichelli, CEO of ZEGA Financial, is on a special 200th episode of the Broken Pie Chart Podcast to go over their predictions for 2023. Will we have a recession? What will the earnings be? What will be the highs, lows, and year end 2023 10 year yield, S&P 500 Index, gold, bitcoin, oil, fed funds rate, and more. Off course these should not be traded on, but instead hear some of our thought process in arriving at these numbers. Plus, as always, some recommendations. 2022 Saw 91% of days with VIX higher than 20% Skew in options market not showing much fear? 2023 prediction rundown. What will the high low and year end S&P 500 2023 number be? Where will the US dollar finish? How high will the Fed Funds rate and 10 Year Treasury yields go? What earnings EPS on the S&P 500 might wind up in 2023 Plus, recommendations Is Die Hard a Christmas movie? Is Lethal Weapon a Christmas movie? Mentioned in this Episode: Capitulation: What does it look like for market bottoms podcast https://podcasts.apple.com/us/podcast/capitulation-markets-tend-to-lead-the-economy/id1432836154?i=1000585228050 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 Jay Pestrichelli's book Buy and Hedge https://www.amazon.com/Buy-Hedge-Iron-Rules-Investing/dp/1087941849/ref=nav_signin?_encoding=UTF8&qid=&sr=&asin=1087941849&revisionId=&format=4&depth=1 Contact Derek [email protected]

What's the saying, history doesn't repeat itself but often rhymes? In 1994 the Fed was raising rates all the way through the Feb 1995 meeting. How does that period compare to now? And does that mean we are in for a repeat of markets? Derek Moore explores that period and makes some comparisons. 1994 Fed interest rate hikes 1994-95 interest rate cycle and market returns The 1995 Fed pivot When did markets turn higher? Hint it's before the last rate hike. Curious reasons Fed began raising rates in 1994. Are the Fed projections ever right (hint, usually not their SEP or statement of econ projections Mentioned in this Episode: History of Fed rate hikes https://www.thebalancemoney.com/fed-funds-rate-history-highs-lows-3306135#:~:text=The%20highest%20fed%20funds%20rate,in%20response%20to%20rising%20inflation. The 94-95 rate cycle including some look back at newspaper headlines and stories https://www.businessinsider.com/1994-federal-reserve-tightening-story-2013-1#protests-grow-louder-in-the-press-following-the-fomcs-may-18-decision-below-are-headlines-from-two-syndicated-ap-columns-the-next-day-18 Effective Fed Funds rate today https://www.newyorkfed.org/markets/reference-rates/effr 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]

Every time you tune into CNBC you hear predictions about when the recession will hit. Then, when the Fed will pivot. But are people focused on the wrong things? Jay Pestrichelli is back with Derek Moore to discuss markets, earnings, and why the contrarian take is everyone can't be right. Plus, the more the yield curve inverts, the harder it will be for a recession to arrive in 2023. 2023 Earnings EPS scenarios review Forward P/E ratios and where multiples will be Why the market goes up or down form here (or sideways) Employment differences in the Household Survey vs Establishment Survey NFP labor market survey low response rate Atlanta Fed Wage tracker moving in wrong direction (moving higher) Monthly Inventories and sales ratios showing higher inventory builds PPI comparing core less food and energy with total PPI PPI higher but lower YoY number History of Fed Pivots and where we are now in the cycle Index of companies with international sales inverse with US Dollar strength Why the dollar needs to go lower Shanghai to Los Angeles container shipping rates almost back to pre-Covid average Mentioned in this Episode: Podcast FTX Crypto Debacle | Yield Curve Inversion | Enough with Recession Talk https://podcasts.apple.com/us/podcast/ftx-crypto-debacle-yield-curve-inversion-enough-with/id1432836154?i=1000586865880 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 Jay Pestrichelli's book Buy and Hedge https://amzn.to/3iSUbXp Contact Derek [email protected]

Last week the payroll and unemployment numbers came out. They surprised to the upside but does the Fed really want people to lose their jobs? How are the unemployment numbers calculated? And an under the radar demographic trend on working age population. Plus, the 2023-year end S&P 500 Index targets are coming out and they are bearish! What are investment banks 2023-year end S&P 500 Index price targets? How do the 2023 targets compare to last year's year end 2022 targets? How wrong were they and will they be wrong again? Are S&P 500 market predictions too bearish and is that good from a contrarian standpoint? What do the unemployment and payroll numbers mean? What's going on with demographics that working age population is trending lower? Labor force participation rate Unemployment rate Working age population Mentioned in this Episode: Atlanta Fed Wage Growth Tracker https://www.atlantafed.org/chcs/wage-growth-tracker Nonfarm payrolls https://fred.stlouisfed.org/series/PAYEMS Household employment survey employment level https://fred.stlouisfed.org/series/CE16OV Labor force participation rate https://fred.stlouisfed.org/series/CIVPART Working age population https://fred.stlouisfed.org/series/LFWA64TTUSM647S#0 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]

Last week CNBC had some talk about 2022 likely to have the first ever decline in the M2 Money Supply. Is that really a big deal given 2020 record 25% growth followed by 2021 12% growth? Then, why velocity of money may not mean anything for inflation after all. What is the M2 money supply? What is the M1 money supply? Comparing M2 vs M1 money supply Discussing massive increase in money supply in 2020-2021 First ever decline in money supply in 2022? Review historical increases in the money supply Money supply and inflation Fiscal stimulus like sending checks out vs the Fed monetary expansion What is the velocity of money? How is velocity of money calculated? Is velocity and inflation correlated? Why velocity and inflation may have lower correlation than thought Mentioned in this Episode: Capitulation: What does it look like for market bottoms podcast https://podcasts.apple.com/us/podcast/capitulation-markets-tend-to-lead-the-economy/id1432836154?i=1000585228050 Academic paper showing low correlation between velocity and inflation: The Behavior of Money Velocity in High and Low Inflation Countries Hugo Rodríguez Mendizábal https://www.jstor.org/stable/3839075 Crypto Crash | US Dollar is the thing to watch podcast https://podcasts.apple.com/us/podcast/crypto-crash-us-dollar-is-the-thing-to-watch/id1432836154?i=1000586009794 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, CEO of ZEGA Financial, is back with Derek this week where they talk FTX bankruptcy and whether it means the end for crypto? Then they discuss the 3-month treasury bond yield inverting with the 10-year treasury bond. Yes, every time that has happened there have been recessions, so what about this time? Earnings continue to be the thing to watch. A quick game of who is right after the Atlanta Fed GDP Nowcast is showing 4.3% growth compared to a measly 0.5% current estimate for Q4 GDP. Finally, some recommendations. FTX Bankruptcy Whether crypto has any use case One bad actor doesn't make the whole space Who's right, the Atlanta Fed GDP Nowcast or the street consensus on Q4 GDP? 3-Month US Treasury inversion with the 10-Year Treasury Yield Does a recession always happen after this inversion? Examining typical un-inversion prior to recessions Discussing whether we had inversion prior to 2020 recession Q3 earnings are mostly done so what does that mean for stocks? Nominal vs real (after inflation) retail sales numbers Mentioned in this Episode: Capitulation: What does it look like for market bottoms podcast https://podcasts.apple.com/us/podcast/capitulation-markets-tend-to-lead-the-economy/id1432836154?i=1000585228050 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 Jay Pestrichelli's book Buy and Hedge https://www.amazon.com/Buy-Hedge-Iron-Rules-Investing/dp/1087941849/ref=nav_signin?_encoding=UTF8&qid=&sr=&asin=1087941849&revisionId=&format=4&depth=1 Contact Derek [email protected]

Derek gives his thoughts on the FTX crypto collapse and bankruptcy. Why crypto are NOT currencies. Then, why everyone should be paying attention to the US Dollar. Why the US Dollar is so important for multi-national companies and their revenues. How those revenues are impacted when the dollar is strong (or weak). Then finally a check in on the Fed Funds probabilities for future rate hikes. Why crypto currencies have failed to be currencies How some crypto returns seem too good to be true There is risk when returns are greater than the risk-free rate Explaining how revenues for US companies are affected by value of US Dollar Why the dollar may be the thing to watch right now Anti-correlations between the US Dollar and stocks US Dollar has biggest one day fall in years How interest rates affect currency exchange rates Deep dive into examples of revenues and earnings with strong and weak US Dollar Microsoft stated they had a 5% negative revenue impact in Q1 from currencies Speculation that FTX used customer funds inappropriately Mentioned in this Episode: Coin Desk article explaining FTX collapse https://www.coindesk.com/policy/2022/11/10/ftx-violated-its-own-terms-of-service-and-misused-user-funds-lawyers-say/ Fed Funds Rate probabilities from CME https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html Microsoft revenues impacted in Q1 2023 earnings report https://www.fool.com/investing/2022/10/30/microsoft-beats-back-king-dollar-and-rising-intere/ 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 is joined again by ZEGA CEO Jay Pestrichelli to discuss what market capitulation looks like and are we there yet? Plus, how markets tend to turn up prior to the economy bottoming historically. Before some recommendations they discuss why the VIX isn't higher and what the VIX curve is telling us now and in the past. What is market capitulation? Historical examples of markets bottoming months ahead of the economy Are markets smarter than the economy? The VIX futures curve Why VIX isn't higher What the VIX is really telling us about volatility expectations Can markets bottom out with just apathy instead of panic? Post Midterm Election bounce? Are we sure we are going to have a recession? Everyone says a recession is coming but can everyone be right? Mentioned in this Episode: Higher interest rates provide opportunity for Buy and Hedge https://podcasts.apple.com/us/podcast/higher-rates-create-opportunity-for-hedging/id1432836154?i=1000581025635 Do markets always go higher after midterms? https://podcasts.apple.com/us/podcast/do-markets-always-go-up-after-midterm-elections/id1432836154?i=1000579103232 Why hedging is the answer for portfolios https://podcasts.apple.com/us/podcast/why-hedging-is-the-answer-for-portfolios-can-hedgers/id1432836154?i=1000578323267 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 is joined by Spencer Wright of Halbert Wealth to discuss historical impact on markets Plus, they discuss the house, senate, and the prevailing polls and other indicators to sift through the noise. Finally, they give their picks in the 5 senate races that matter. Market performance post midterm elections since 1962 Why markets might like split government What the polls and adjusted polls are saying What the past tells us about likelihood of change of power in the house during midterms What do polls miss? Markets in midterm years leading up to election day Why long term it doesn't matter which party is in power President, Senate, and house How sitting president approval ratings play into races What the betting markets are saying about the senate race and late momentum When will we know the outcomes (hint: it may not be on election night) Where can you find info on latest polls Where can you find deadlines for mail ballots and when they will be counted Disparity between Democrats and Republican candidate money raised and spending Bias adjusted poll averages and what they are Mentioned in this Episode: RCP (real clear politics) latest polling data https://www.realclearpolitics.com/epolls/latest_polls/ Interactive US Senate 2022 midterm map https://www.270towin.com/2022-senate-election/ CNBC piece detailing candidate spending for Senate races https://www.cnbc.com/amp/guide/midterms-2022-top-senate-races-oz-walker-vance-kelly/ State legislature info on states mail ballot processing, counting, and deadlines https://www.ncsl.org/research/elections-and-campaigns/vopp-table-16-when-absentee-mail-ballot-processing-and-counting-can-begin.aspx Absentee ballot deadlines https://www.vote.org/absentee-ballot-deadlines/ Five Thirty Eight election probability models https://projects.fivethirtyeight.com/2022-election-forecast/ What betting markets say about election probabilities https://electionbettingodds.com/ 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

The Fed is paying out more in interest than it is taking in, resulting in an IOU to the US Treasury. Is this a big deal? Did the Fed believe this was possible? Understand why you may see in the news the Federal Reserve is running a deficit. Plus, is the Treasury about to do bond buybacks to increase liquidity in markets? What is a Federal Reserve deferred asset liability How much of a deficit is the Fed running? Why is the Fed paying out more in liabilities than its receiving in interest? Why are Janet Yellen and the Treasury thinking about doing bond buybacks? What does it mean when bond markets are illiquid? What is the average interest rate on outstanding US Treasuries? Can the Federal Reserve go bankrupt? What role to Fed Overnight Reverse Repos have in this? How does the fed pay interest out to banks through excess reserves? Reviewing 2013 Fed paper on potential for deferred assets (liability) to arise Mentioned in this Episode: Financial Times article on treasury bond liquidity https://www.ft.com/content/bc7271f9-a0aa-4643-bed3-40d2d5ec80d1 Brookings article on Fed running a deficit and owing the Treasury https://www.brookings.edu/blog/up-front/2022/06/01/what-if-the-federal-reserve-books-losses-because-of-its-quantitative-easing/amp/ Average interest rates on US Treasury bonds, bills, notes https://fiscaldata.treasury.gov/datasets/average-interest-rates-treasury-securities/average-interest-rates-on-u-s-treasury-securities NY Fed list of current SOMA Fed holdings https://www.newyorkfed.org/markets/soma-holdings Fed Overnight Reverse Repo outstanding https://fred.stlouisfed.org/series/RRPONTSYD What are Overnight Reverse Repos https://podcasts.apple.com/us/podcast/what-are-reverse-repos-and-repos-fed-enters-overnight/id1432836154?i=1000523659106 Fed earnings remittances due to the U.S. Treasury https://fred.stlouisfed.org/series/RESPPLLOPNWW#0 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]

The Federal Reserve shows no sign of slowing down rate hikes in the near term. But are they doing anything? ZEGA CEO Jay Pestrichelli is back on the show with Derek Moore to debate. Plus, why we care about England's BOE moves. Finally, some recommendations. What is the deal with the UK's pensions and government bonds? Is the Fed doing it all wrong? Container shipping rates back to normal? The waiting is over at the Port of LA Inflation run rates and what we need to happen What would it take for a Fed pivot based on some historical numbers Real vs Nominal numbers in economics Lag in OER (Owners Equivalent Rents) and Rent of Primary Residence in CPI Mentioned in this Episode: What are Overnight Reverse Repos https://podcasts.apple.com/us/podcast/what-are-reverse-repos-and-repos-fed-enters-overnight/id1432836154?i=1000523659106 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 Jay Pestrichelli's book Buy and Hedge https://www.amazon.com/Buy-Hedge-Iron-Rules-Investing/dp/1087941849/ref=nav_signin?_encoding=UTF8&qid=&sr=&asin=1087941849&revisionId=&format=4&depth=1 Contact Derek [email protected]

As Q3 earnings season is about to kick off we'll look at what the drivers of returns are for the S&P 500 Index and individual stocks. Annualized returns are a mix of sales growth, margin growth, dividends, share count, and PE multiple growth. See how to think about these levers in relation to price. What are the return attributions of the S&P 500 Index returns? PE multiple growth vs multiple contraction How share buybacks or issuance increase or decrease earnings Dividend yield as a percentage of total return Net Margin expansion or contraction Sales growth has been lower than you might think over the last 10 years EPS or earnings per share 2022 Q3 earnings estimates on EPS and sales Nature of rotation of sectors contributing to total earnings of the S&P 500 Value After Hours podcast and YouTube channel Mentioned in this Episode: Augustus investor letter (click on first one) page 24 breaking down 2011-2021 earnings attributions https://www.semperaugustus.com/clientletter Refinitiv Q3 earnings preview breakdown https://lipperalpha.refinitiv.com/2022/10/sp-500-22q3-earnings-preview-a-turning-point/ 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]

The rise of interest rates has been all over the news, but is there a silver lining? Yes, due to higher rates in short-term US treasuries hedged equity strategies now can further manage risk by substituting out short duration high yield to short term treasuries. ZEGA Financial CEO Jay Pestrichelli and Derek Moore are back to explain how a flagship strategy Buy and Hedge is leveraging the new environment. What are Buy and Hedge strategies? Comparing the risk profile of short-term US Treasuries vs short-duration high yield bonds. Comparing risk profile of treasuries to corporate bonds Explaining the yield to maturity on bonds Where a return comes from in a bond Coupon payments(interest) vs appreciation to par Interest rate risk in bonds Duration as a measurement of how market values change for every 1% change in rates How Buy and Hedge has limited risk in buying long call options and US treasuries Mentioned in this Episode: Why hedging is the answer for investors https://podcasts.apple.com/us/podcast/why-hedging-is-the-answer-for-portfolios-can-hedgers/id1432836154?i=1000578323267 Margin Call Movie and Value at Risk Explained https://open.spotify.com/episode/2XJ58KAoQKw2sdC48KHyPp 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 Jay Pestrichelli's book Buy and Hedge https://www.amazon.com/Buy-Hedge-Iron-Rules-Investing/dp/1087941849/ref=nav_signin?_encoding=UTF8&qid=&sr=&asin=1087941849&revisionId=&format=4&depth=1 Contact Derek [email protected]

Does anyone who makes predictions in the financial news media know anything? Lots of headlines are making predictions so why not add some perspective from past bear markets (and bull markets) where many things' people say never came true. Why investors make bad decisions due to news. How investors opt to stay in cash even as markets firm up. We'll go through some past predictions to see how the mood sways at different points in cycles. What the financial media is saying New estimates and predictions are taking a bearish tone Reading prior headlines from several periods show predictions aren't worth that much Why investors tend to shy away from markets even when things are cheaper How analyst estimates can be wrong while the market focuses on the forward PE ratio Mentioned in this Episode: Why hedging is the answer for investors https://podcasts.apple.com/us/podcast/why-hedging-is-the-answer-for-portfolios-can-hedgers/id1432836154?i=1000578323267 Is the strong us dollar a problem? https://podcasts.apple.com/us/podcast/is-the-strong-us-dollar-a-problem/id1432836154?i=1000571388439 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]

Inflation surprised to the upside last week. Although it was close to the Cleveland Fed's nowcast estimate. So, what would it take for inflation to get back to the 2% level and when? We'll go through the numbers today to illustrate what rate of monthy inflation would be needed to get there buy the spring. Its just math, so here we see the Feds base rates come into plan. How is inflation month over month calculated? How is inflation year over year calculated? How do month to month and year over year numbers matter for future inflation? What is the difference between CPI and Core CPI? Why Core CPI might keep going higher for a while due to lagging affect What is OER or Owners Equivalent Rent? Mentioned in this Episode: Inflation Nowcast Cleveland Fed https://www.clevelandfed.org/our-research/indicators-and-data/inflation-nowcasting.aspx Do markets go up after midterm elections? https://podcasts.apple.com/us/podcast/do-markets-always-go-up-after-midterm-elections/id1432836154?i=1000579103232 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]

Do markets always go up after the midterm elections? What about market performance during the presidential cycle? Interesting data points to historical numbers being bullish for markets next year. What could go wrong? Plus, why it may not matter what political party is in power. Market performance before and after midterm elections When are midterm elections held? Significant swings in power during midterm election years Market performance and presidential cycles Which year of president's term is the best for markets historically? Why markets historically are flat to down pre-midterm elections Why markets historically rally post-midterm elections Market performance depending on which party holds power Does it matter which political party is in power for markets? Mentioned in this Episode: Market historical performance during different years of Presidency https://www.trade2win.com/articles/2128-presidents-politics-u-s-stock-market Market performance pre and post midterm elections https://www.usbank.com/investing/financial-perspectives/market-news/stock-market-performance-after-midterm-elections.html Market performance in midterm election years vs all other years https://www.capitalgroup.com/advisor/ca/en/insights/content/articles/us-midterm-elections-and-market-moves.html 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]

Why Hedging Is the Answer for Portfolios | Can Hedgers Buy Markets Lower? Show Summary: Rather than try to time markets or worry about whether there is a selloff around the corner, look to stay invested but be hedged. But what is hedged equity? What are the benefits for investors who may be barraged by various predictions and news? How do hedged equity strategies work? All this and more plus some new recommendations. Eliminate the need to time markets Reduce fear- but stay invested Who is hedged equity for? How to look for more growth especially near or in retirement 3 main phases for investors accumulation, base maximization, and distribution What is the hedgers opportunity? What is the cost of hedging? How the short duration fixed income (or other income producing pieces) reduces cost How do each of the components move within a portfolio Comparing hedged equity to the 60/40 portfolio Will treasuries be used in lieu of corporate bonds as a funding source? What are the main risks for bonds? How bonds move closer to par value at maturity baring defaults What is the current default rate for high yield bonds? Mentioned in this Episode: Debating what a recession is https://podcasts.apple.com/us/podcast/debating-what-a-recession-is-someone-is-wrong/id1432836154?i=1000571629306 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 Jay Pestrichelli's book Buy and Hedge https://amzn.to/3Je7xqa Contact Derek [email protected]

Was Bed Bath and Beyond a Gamma Squeeze? How the options market can sometimes drive buying and selling. Plus, Jerome Powell does a short press conference talking tough about taming inflation. Ryan Cohen option positions in Bed Bath and Beyond What is a Gamma Squeeze? How market makers hedge their book to remain flat When gamma squeezes don't move the markets Jerome Powell talks tough in his press conference trying to send right message Did markets not understand the fed before? Some recommendations including the Game of Thrones House of Dragons Premiere D.B. Cooper documentary on Netflix Mentioned in this Episode: Debating what a recession is https://podcasts.apple.com/us/podcast/debating-what-a-recession-is-someone-is-wrong/id1432836154?i=1000571629306 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 Jay Pestrichelli's book Buy and Hedge https://amzn.to/3Je7xqa Contact Derek [email protected]

Jay Pestrichelli once again joins Derek Moore whether stocks never make new lows after retracing half a bear market drawdown. Plus, how many in the industry have never see a rising rate environment. Then, deconstructing earnings, profit margins, and revenues to go under the hood and how the US dollar strength plays into all of this. Have stocks ever went on to new lows after retracing half a bear market drawdown? Looking at the 2000-2002 bear market Reviewing the 2008-2009 great recession Chart crimes Most investment professionals haven't seen a rising rate environment Relationship between profit margins and earnings Relationship between revenues and earnings Playing devils advocate on net profit margins How the US Dollar strength is affecting earnings Some TV show recommendations Mentioned in this Episode: Debating what a recession is https://podcasts.apple.com/us/podcast/debating-what-a-recession-is-someone-is-wrong/id1432836154?i=1000571629306 Does a strong dollar pose problems for US companies? https://podcasts.apple.com/us/podcast/is-the-strong-us-dollar-a-problem/id1432836154?i=1000571388439 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 Jay Pestrichelli's book Buy and Hedge https://amzn.to/3Je7xqa Contact Derek [email protected]

Derek Moore is back to talk about the difference between diversifiable risk and systematic market risk. Diversification might fail the very time you want it most. The argument for diversification + hedging. Why bonds didn't act as a diversifier this year. Diversifiable risk Systematic market risk 2007-2009 Period where diversification failed Why diversification is better than concentrated stock positions Comparing some individual companies vs indexes in 2008 Why bonds failed to diversify during 2022's bear market How interest rates are the main driver of bond market value changes Why new investors should diversify Comparing single stock volatility to well diversified indices Mentioned in this Episode: Download full whitepaper on hedging single stock concentrated risk https://static.twentyoverten.com/5b313bf81c53ec3270915df3/27gJFrs2H/Concentrated-stock-positions-Full-White-Paper.pdf 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 back to discuss the war on share buybacks after a rumored 1% excise tax announcement. What are share buybacks? Why do companies do them? Plus, when you'll officially here whether we are in a recession. Recessions are called long after they start NBER Nation Bureau of Economic Research committee dating business cycles What NBER criteria uses to call recessions Are share buybacks good or bad? 1% excise tax on share buybacks Dilution vs anti-dilution of share issuance and share buybacks How share buybacks affect EPS Earnings per Share Walmart share buybacks and net income effects to EPS Amazon has more shares today than in 2006 Employee stock-based compensation and share buybacks How little corporate taxes represent of total revenues of US government Dividend yield vs share buyback yield Total augmented stock yield (buybacks + dividends) Mentioned in this Episode: Debating what a recession is and isn't podcast https://podcasts.apple.com/us/podcast/debating-what-a-recession-is-someone-is-wrong/id1432836154?i=1000571629306 NBER business cycles – when a recession or end of recession was called https://www.nber.org/research/business-cycle-dating/business-cycle-dating-committee-announcements Apple's buyback yield https://finbox.com/NASDAQGS:AAPL/explorer/buyback_yield Economic PI site http://econpi.com/index.php 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 once again joins Derek Moore to discuss the disconnect between the market's expectation of future interest rate raises and the Fed's stated intentions. Did the market hear the right things from Jay Powell? How earnings through Q2 have held up and are still growing despite pessimistic calls otherwise. Plus, the debate about what a recession is and is not. Someone is wrong on interest fed rate raises Debate about what is a recession Why 2 quarters is not a recession How the NBER is the arbiter of official recessions Q2 earnings rise along with revenues despite pessimistic forecasts What happens if inflation is over 8% when release in August? Disconnect between market and inflation Inflation 2x2 and EPS analysis 4 outcomes on EPS and inflation and what it means for markets Post midterm election bounce in the S&P 500 Index? What sectors are growing, and which are declining per Q2 earnings Stagflation discussion Can we really have a recession with low unemployment? Mentioned in this Episode: Does a strong dollar pose problems for US companies? https://podcasts.apple.com/us/podcast/is-the-strong-us-dollar-a-problem/id1432836154?i=1000571388439 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 Jay Pestrichelli's book Buy and Hedge https://amzn.to/3Je7xqa Contact Derek [email protected]

The US Dollar has been surging (getting stronger) as the Fed is raising rates more than some other countries or regions central bank. So why is a strong dollar problematic? How does a strong or weak US Dollar hurt or help US companies? Derek Moore is back to give some easy to understand examples plus how USD denominated debt from other countries will come under pressure with a stronger dollar. Why a strong US Dollar can hurt companies Why a weak US Dollar can help companies US Dollar at parity with the Euro How sales in foreign countries are affected by changes in the US Dollar Does FactSet data on Q2 earnings disprove the strong dollar bad for earnings narrative? US companies report earnings in US dollars no matter where their sales are from What is the dollar index? What is the trade weighted dollar index? Exchange rates explained between two countries' currencies Examples of how changes in currency exchange rates impact sales and costs Mentioned in this Episode: Current makeup of Trade Weighted US Dollar Index The Fed - Foreign Exchange Rates - H.10 - Currency Weights (federalreserve.gov) FactSet earnings and revenues comparison companies with less than 50% of revenue from outside US and companies with greater than 50% of revenues from outside the US https://t.co/ZS4eCCc1v6 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]

Michael Lewis wrote the book "The Big Short" that later was turned into a movie starring Christian Bale, Steve Carrell, and Ryan Gosling, Brad Pitt, and Jeremy Strong. The movie focused on 3 different investors who bet against mortgage bonds before the Great Recession and housing market collapse using credit default swaps. Want to get a primer on swaps and how they work before you watch or re-watch the movie? What are Credit Default Swaps (CDS)? What do bond ratings mean? What are the annual premiums on credit default swaps? How to convert basis points to an interest rate percentage? What is counter party risk? What does Michael Burry use to short housing in the Big Short Movie? How did people bet against the housing market? What does the spread on credit default swaps mean? Using Credit Default Swaps to hedge or speculate Mentioned in this Episode: Current Credit Default Swaps Spreads on Sovereign Country Bonds https://www.cnbc.com/sovereign-credit-default-swaps/ Michael Lewis Book the Big Short https://amzn.to/2SNhUr1 The Big Short Movie https://amzn.to/31ROJrc 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]