Broken Pie Chart

This week Derek Moore notes the historic start to the year in bonds given the rise in interest rates and how low they were at the beginning of this cycle. Then Derek discusses target date funds. Popular in 401k plans, many investors don't fully understand what they are and the different types of risks inherent in them. Historic first half drawdown in the US Aggregate Bond Index What are target date funds? What is the glide path for target date funds? What the intent of target date funds is Why investors might believe they have less risk than they do The 2008-09 experience for investors in target date funds Post Great Financial Crisis hearings on target date funds How target date funds with same date experienced so variation in returns Examining some near-term retirement date funds Chapter 2 from the book Broken Pie Chart and target date funds Mentioned in this Episode: Contact Derek Moore [email protected] ZEGA Financial www.zegafinancial.com Public hearings 2009 on retirement target date funds https://www.sec.gov/spotlight/targetdatefunds/targetdatefunds061809.pdf

This week Derek Moore is joined again by ZEGA Financial CEO Jay Pestrichelli to talk about the recent blowups in Crypto and review some contrarian picks that worked and didn't work. Plus, what is the recent backup in rates in the bond market telling us about the probability of a recession and negative GDP for Q2? Yields backing off predicting a recession? Flattening & Inverted (once again) yield curve Crypto winter and blowups What is the bond market telling us? Contrarian corner - what has aged well and what has not? Will the earnings story hold up? (Margins, EPS, inflation, inventory) Top Gun movie gets a recommendation Mentioned in this Episode: Contact Derek Moore [email protected] Derek Moore's book "Broken Pie Chart" https://amzn.to/3OGm1RG ZEGA Financial www.zegafinancial.com Jay Pestrichelli Book "Buy and Hedge" https://amzn.to/3y4wwak MicroStrategy Bitcoin play https://podcasts.apple.com/us/podcast/is-bitcoin-play-by-microstrategy-ceo-michael-saylor-crazy/id1432836154?i=1000567039227 Podcast 4 R's recession, rates, reduction of https://podcasts.apple.com/us/podcast/most-telegraphed-recession-ever-the-4-rs-recession/id1432836154?i=1000563145394 Death of 60/40 Portfolio https://podcasts.apple.com/us/podcast/death-of-60-40-portfolio-markets-during-midterm/id1432836154?i=1000555384965 Earnings Multiple expansion vs earnings expansion (or reduction) https://podcasts.apple.com/us/podcast/desconstructing-stock-price-earnings-multiple-expansion/id1432836154?i=1000545436987

This week Derek Moore tries to answer the question of why things like TIPS Bonds (Treasury Inflation Protected Securities) down YTD are even though inflation is up. Plus, golds response to inflation. Finally, can we have a recession with low unemployment plus why Bitcoin thus far has not been an inflation hedge despite claims otherwise. Why TIPS bonds (Treasury Inflation Protected Securities) were down YTD even though inflation was up Duration risk and interest rate risk for bonds TIPS bonds had negative yield to maturities earlier in the year What about gold as an inflation hedge this year? Bitcoin has proven not to be a good inflation hedge in its first test Bitcoin has traded more like a risk-on asset What questions to BLS surveys use to determine if you are employed or unemployed What is the labor force participation rate? Can we have a recession with low unemployment? Mentioned in this Episode: Contact Derek Moore [email protected] ZEGA Financial www.zegafinancial.com BLS Unemployment – How They come up with unemployment number https://www.bls.gov/cps/cps_htgm.pdf Marcel Benjamin explains in detail how TIPS bonds work https://podcasts.apple.com/us/podcast/tips-inflation-protected-bonds-explained-interest-rate/id1432836154?i=1000535445537 Marcel Benjamin's deep dive on High Yield Bonds plus what are Zombie companies https://brokenpiechart.libsyn.com/marcel-benjamin-high-yield-bonds-explained-what-are-zombie-companies

This week Derek Moore discusses the news around MicroStrategy's leveraged Bitcoin strategy and the impending margin call should Bitcoin close below 21,000. Why would a company put their cash in a volatile asset like crypto? Derek explains the situation and news coverage considering Bitcoin's recent drop in price. How much Bitcoin does MicroStrategy hold? How much has MicroStrategy lost on Bitcoin? What is digital asset impairment charge due to Bitcoin drop? Leveraged Bitcoin strategy by Michael Saylor CEO of MicroStrategy Terms of Bitcoin loan When will a margin call occur on MicroStrategy's collateralized Bitcoin loan? MicroStrategy issued debt including senior notes, convertible notes, and common stock to fund Bitcoin purchases. Why not just buy other stocks (sarcasm) if a company is going to buy a volatile asset like crypto? What about Tesla's Bitcoin holdings? Did Michael Saylor say to mortgage your house to buy Bitcoin? What is MicroStrategy's average cost on their Bitcoin holdings? Mentioned in this Episode: Contact Derek Moore [email protected] ZEGA Financial www.zegafinancial.com Forbes talks accounting treatment of Bitcoin for companies https://www.forbes.com/sites/shehanchandrasekera/2022/06/01/bitcoins-accounting-treatment-is-artificially-degrading-microstrategys-bottom-line/?sh=c4abb4433e11 MicroStrategy Q4 2021 report https://www.microstrategy.com/content/dam/website-assets/collateral/financial-documents/press-release-archive/microstrategy-announces-fourth-quarter-2021-financial-results_02-01-2022.pdf MicroStrategy Q1 2022 report https://www.microstrategy.com/content/dam/website-assets/collateral/financial-documents/events-presentations/Q1-2022_microstrategy-earnings-presentation.pdf MicroStrategy Bitcoin margin call on loan https://fortune.com/2022/05/04/michael-saylor-microstrategy-margin-call-bitcoin/amp/

This week Derek Moore discusses why Tesla's 3-1 stock split and Amazons 20-1 stock split don't really matter except potentially making them eligible to join the Dow Jones Index. Plus, some have made comparisons of the selloff in tech to the 2000 Dotcom crash. As Derek explains, they are different and not similar given the numbers then and now. Finally, Derek gives some surprising data points about who the number one weighted stock was in March of 2000 in the Nasdaq 100 Index. You'll never guess it! Who was the highest weighted company in March 2000 in the Nasdaq 100 Index (QQQ)? Comparing companies in the Dotcom crash era to today's highest weighed tech companies Why this is not a Dotcom 2.0 situation Comparing the forward earnings multiple then and now Is Tesla going into the Dow Jones Index? Will Amazon join the Dow Jones Index? What companies remain in the top 10 QQQ today vs. 2000? Sirius Satellite cumulative 10-year earnings 1990-2000 Why stock splits don't matter explained Why stock splits do matter given companies were probably already moving higher How the S&P 500 Index and Nasdaq 100 Index weight companies compared to the Dow Jones Index Mentioned in this Episode: Contact Derek Moore [email protected] ZEGA Financial www.zegafinancial.com Derek Moore's Book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547?ref_=nav_signin& Tesla announces 3-1 stock split https://finance.yahoo.com/news/tesla-stock-split-june-2022-212130185.html What does Amazon's 20-1 stock split mean for investors https://www.morningstar.com/articles/1097120/what-does-amazons-stock-split-mean-for-investors

Derek Moore gives an in-depth explanation of each of the components that make up GDP. No, 2 consecutive negative quarters of GDP do not mean a recession! How to use GDP nowcasts to spot trends in GDP and spot recession risks. How the NBER declares recessions and what they look at. How is GDP calculated? What are components of GDP? What are the most important components driving GDP? Business investment vs consumer spending Government spending is not the most important aspect Explaining Change in Private Payrolls Consumer Spending PCE Residential Investment Non-Residential Fixed Investment Change in Private Inventories Government spending What is the NBER National Bureau of Economic Research How NBER declares recessions Why NBER declares recessions and recoveries after the fact Historical list of recessions Mentioned in this Episode: Contact Derek Moore [email protected] ZEGA Financial www.zegafinancial.com Derek Moore's Book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547?ref_=nav_signin& Atlanta Fed GDP Nowcast https://www.atlantafed.org/cqer/research/gdpnow?panel=3 BEA contributions to percent change in real gross domestic product https://apps.bea.gov/iTable/iTable.cfm?reqid=19&step=2&isuri=1&1921=survey#reqid=19&step=2&isuri=1&1921=survey Podcast most telegraphed recession ever? https://podcasts.apple.com/us/podcast/most-telegraphed-recession-ever-the-4-rs-recession/id1432836154?i=1000563145394 Real GDP precent change historical https://fred.stlouisfed.org/series/A191RL1Q225SBEA NBER historical recessions https://www.nber.org/research/data/us-business-cycle-expansions-and-contractions How NBER declares a recession based on 4 or 2 categories https://www.nber.org/research/business-cycle-dating

Derek Moore is back to discuss historical bear markets. How long do they last and how long does it take to get back to previous highs? What lessons can we take from prior bear markets? Are people too pessimistic about the economy? Plus, why the high yield market may be in better shape given the maturity schedule. How long do bear markets last? How long after a bear market do stocks recover their losses? Are high yield bond underlying companies financially, ok? Did high yield bond companies already refinance into lower rates? When will high yield companies need to refinance when bonds mature? Reviewing some surveys that point to extremely pessimistic investing public Does the length of market declines tell us how long to recover? Explaining what happens when companies' debt matures What is a call provision on a bond? Mentioned in this Episode: Contact Derek Moore [email protected] ZEGA Financial www.zegafinancial.com Derek Moore's Book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547?ref_=nav_signin& Historical bear market drawdowns and time to recovery since 1950 https://awealthofcommonsense.com/2022/05/how-long-do-bear-markets-last/

ZEGA CEO Jay Pestrichelli joins Derek Moore to discuss the current economic and market environment. Topics include the 4 Rs Recession, Rates, Reduction of Multiples (PE Ratios), and the conflict in Russia. Why the Fed raising rates may not help inflation Impact of Walmart and Target earnings results on net profit margin expectations End of 2021 market was pricing in higher margins and growth Earnings so far have held up well Earnings expectations have increased not decreased Why interest rates matter for many putting values on companies and markets Is Russia factored into markets? Everyone is talking recession so is it so obvious people may be wrong? The market continues the 2021 trend in 2022 by reducing the forward PE ratio A detour to explain how a reverse discounted cash flow on Tesla shows in the end its buyers and sellers Retail sales as something to watch in the aftermath of Walmart and Target Mentioned in this Episode: Contact Derek Moore [email protected] ZEGA Financial www.zegafinancial.com Derek Moore's Book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547?ref_=nav_signin& Jay Pestrichelli's Book Buy and Hedge https://amzn.to/3wHn1gz How interest rates affect market valuations https://podcasts.apple.com/us/podcast/why-interest-rates-effect-stock-market-valuations/id1432836154?i=1000561458590 CME Fed Interest Rate Probability Tool https://www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html

Derek Moore explains why commentators on CNBC and Bloomberg have been talking about valuations coming down due to interest rates increasing. Why do interest rates matter to stock valuations? How would you explain it to someone? Plus, how all these inputs are estimates and can change over time. How to understand the present value of future cash flows DCF or discounted cash flow model Earnings estimates on the market for 2022, 2023, and 2024 Intrinsic valuation of the S&P 500 Index based on different index rates What is the equity risk premium? What is the discount rate? How does the 10-year treasury bond interest rate factor in? What is the terminal rate of growth for markets? Mentioned in this Episode: Jurrien Timmer of Fidelity 2-Year Treasury Yield Implied PE vs Forward PE S&P 500 Index https://twitter.com/TimmerFidelity/status/1525190396413894657 Professor Aswath Damodaran S&P 500 valuation estimate worksheet https://aswathdamodaran.blogspot.com/2022/05/in-search-of-steady-state-inflation.html Contact Derek Moore [email protected] ZEGA Financial www.zegafinancial.com Derek Moore's Book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547?ref_=nav_signin&

Spencer Wright of Halbert Wealth is back on with Derek to discuss what races in the Senate to watch. Predictions for the House to flip Republican or say Democratic. And a way to early look at the 13 Keys to the White House and the state of things as they are now. Plus, what do markets historically do pre and post the midterm elections. How many 2022 Senate races are considered up for grabs? Reviewing the big edge republicans have in the generic ballot polls. What does win of one or both houses do for the party in power? Why the midterms matter for the stock market. Reviewing the 13 Keys to the White House as they stand now. Discussion of the state of the economy in the short and long term. What historically has happened around midterms in the past for markets? Where can people follow key races? What is the generic congressional polling telling us? How does the economy play into House and Senate races? What will be the impact of inflation on elections? Mentioned in this Episode: Updated Senate Consensus predictions map https://www.270towin.com/2022-senate-election/consensus-2022-senate-forecast Updated House Consensus predictions map https://www.270towin.com/2022-house-election/ 13 Keys to the White House predictive model https://pollyvote.com/en/components/models/mixed/keys-to-the-white-house/ Contact Derek Moore [email protected] ZEGA Financial www.zegafinancial.com Derek Moore's Book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547?ref_=nav_signin&

ZEGA Financial CEO Jay Pestrichelli is back to discuss what asset classes have the best real, after inflation returns historically. Plus, is bad news good news around economic releases as it pertains to chances the Fed can't raise rates as much? What would a bad Q1 GDP print mean for markets? Then they discuss the volatility regime and touch on talk about recessions by Deutsche Bank. Does bad news mean good news if the Fed can't raise rates as much? Talking real after inflation returns historically and how commodities have lagged Deutsche Bank calling for a recession Why raising rates can't solve supply chain issues but can tamp down demand. Bonds having a bad year With the Q1 GDP announcement what would surprise the markets? Midterm elections and the markets Earnings still growing along with revenues Market multiple re-rating continues Mentioned in this Episode: Contact Derek Moore [email protected] ZEGA Financial www.zegafinancial.com Derek Moore's Book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547?ref_=nav_signin& Buy and Hedge by Jay Pestrichelli https://amzn.to/3KA40Se White Paper On Hedging Low Basis Concentrated Stock positions (right hand side to download) https://zegafinancial.com/products/concentrated-stock

Derek Moore explains that drops like Netflix this week are not that rare in single stocks. There are tons of examples, especially around earnings releases. Why do people have concentrated portfolios? Diversification vs. single stocks. Problems with selling low-cost basis stocks. How to hedge large, concentrated positions. What caused Netflix to drop 35% after earnings? The risk inherent in holding large, concentrated positions in stocks Reasons investors hold concentrated stock positions Low-cost basis concentration reasons versus the YOLO (You Only Live Once) crowd Examining why investment advisors haven't been able to offer value for concentrated low basis shares The numbers don't lie when it comes to standard deviation and risk compared to markets Examples of past single day drops after earnings Surprisingly, many stocks are down 40% or 50% from all-time highs Single stock risk versus market risk When diversification on its own failed Why diversification plus hedging works Mentioned in this Episode: Contact Derek Moore [email protected] Derek Moore's Book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547?ref_=nav_signin& White Paper On Hedging Low Basis Concentrated Stock positions (right hand side to download) https://zegafinancial.com/products/concentrated-stock

Derek Moore takes listener requests by taking a deep dive into the how and why when it comes to market values of bonds changing. How to understand what duration is and why it matters to measure risk in bonds to changes in interest rates. What about mortgage-backed bonds? Bonds can be confusing, but Derek breaks down the terms so next time you hear someone talking on CNBC you know what they are referring to. What is a bonds duration in relationship to interest rates? How to calculate a bonds duration. What is negative convexity with mortgage bonds? Why are lower coupon bonds more at risk for changes to interest rates? Why are shorter maturity bonds less susceptible to interest rate risk? How do cash flows from coupon payments effect bond market values? What is the after-inflation calculation for return? What are real returns (after inflation) Mentioned in this Episode: Contact Derek Moore [email protected] Derek Moore's Book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547?ref_=nav_signin& Tips Treasury Inflation Protection securities | Interest Rate Risk and Duration https://brokenpiechart.libsyn.com/tips-inflation-protected-bonds-explained-interest-rate-risk-duration-and-more-with-marcel-benjamin Senior Loans and Leveraged Loans explained https://brokenpiechart.libsyn.com/dan-mcmullen-talks-senior-loans-leveraged-loans-clos-and-more High Yield Bonds Explained plus what zombie companies are https://brokenpiechart.libsyn.com/marcel-benjamin-high-yield-bonds-explained-what-are-zombie-companies

Derek Moore gives a contrarian take on the Fed raising rates. What if raising rates causes a major component of the CPI to increase rather than decrease? If the Fed raises rates, mortgage rates rise, demand increases for rents, and owner's equivalent rents rise? In this episode, Derek explains what is measured in the CPI and explains how OER or Owners Equivalent rent and rents are calculated by the BLS each month. What percentage of the CPI is housing? How is OER or Owners Equivalent Rent calculated by the BLS? How mortgage rates impact the supply and demand of housing Study showing housing rents increase during monetary contractionary shocks Financing costs for home builders How the construction of housing costs was changed by BLS in 1983 Discussing relationship between mortgage rates and housing prices The type of inflation we are experiencing Supply side vs demand side inflation Mentioned in this Episode: Contact Derek Moore [email protected] Derek Moore's Book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547?ref_=nav_signin& Study referenced showing housing component rises doing contractionary monetary shocks https://onlinelibrary.wiley.com/doi/full/10.1002/jae.2679 How BLS creates housing data https://www.bls.gov/cpi/factsheets/owners-equivalent-rent-and-rent.pdf

Derek Moore is joined once again by ZEGA Financial CEO Jay Pestrichelli to talk yield curve inversion. What is the yield curve inversion and why do investors care? Plus, reviewing historical precedent on prior yield curve inversions prior to recessions. What is the average time to recession from yield curve inversion? When has it not worked? Later, they discuss inflation's effect US Large Cap earnings. What are the consequences from higher inflation? What about deflation? What is the yield curve inversion? Why 10-year US Treasury minus 2-year US Treasury yields are watched by market prognosticators What about the 5 year and 10-year treasury inversion? Reviewing historical yield curve inversions and recessions Idea that inversion alone doesn't cause a recession without a catalyst What does higher inflation mean for corporate earnings? What does higher inflation mean for net profit margins? Touching on deflation effect on companies Mentioned in this Episode: Contact Derek Moore [email protected] Derek Moore's Book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547?ref_=nav_signin& Jay Pestrichelli Book Buy and Hedge https://amzn.to/3i2UZoL

Derek Moore is joined once again by ZEGA Financial CEO Jay Pestrichelli to discuss whether now is finally the death of the 60/40 portfolio? A Bloomberg article points out when 10-year treasury yields move up or through long term channel resistance things happen. Plus, travel back in time to 1982 where we read some expert comments in NY Times article around predictions on interest rates. Finally, how markets have historically done in midterm election years. Bond yields spike while the curve flattens or inverts What happens historically when the 10-year treasury yield moves to long term channel resistance? Equities during midterm election years Reviewing year to date total returns in US Aggregate Bond Index (AGG) vs the S&P 500 Index (SPY) How bonds may not provide the same protection this time. How housing prices still rose even during a 10-year period of high inflation and rising interest rates. Going to the archives of a 1982 NY Times article when the 30-year treasury yield was pushing 16% Mentioned in this Episode: Contact Derek Moore [email protected] Derek Moore's Book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547?ref_=nav_signin& Jay Pestrichelli Book Buy and Hedge https://amzn.to/3i2UZoL

Derek Moore is back to talk about inflation and how there are some misconceptions about what happens if inflation subsides. At the same time, many things we use are enjoying decades long deflation making them cheaper to use. Hint: long distance calling. Plus, why low interest rates do and don't cause inflation. Will raising rates reduce oil prices? Supply and demand is still king. What are some misconceptions around inflation? Inflation coming down is a reduction in the upward rate of change How to inflation adjust prices across periods CPI Consumer Price Index Low interest rates and inflation Discount rate for future earnings in stocks Housing and asset price inflation Oil prices and supply and demand Oil rig counts and inventories Will raising rates cause a recession? Mentioned in this Episode: Contact Derek Moore [email protected] Derek Moore's Book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547?ref_=nav_signin& CPI Consumer Price Index historical https://fred.stlouisfed.org/series/CPIAUCSL

Derek Moore is joined once again by ZEGA Financial CEO Jay Pestrichelli to discuss why volatility remains high. How the VIX Index stays elevated even after the initial reasons subside. What is driving the market pricing of the S&P 500 Index and how it compares to prior 10-year periods. Plus, comparing this high oil price period to prior ones on an inflation adjusted basis. What are driving returns right now (earnings or multiples) Is the market getting cheap on a forward PE multiple base? Comparing 10-year periods (referencing Sempres Augustus letter) Looking at price inputs like revenues, share count, margins, multiples, and dividend yield Is the embedded volatility premium (VIX Index) here to stay? Discussing oil prices on an inflation adjusted basis When do high oil prices matter? When does inflation matter to the economy and margins for companies? Will CPI released in April for the month of March reveal a +10% YoY? Plus, Derek admits a bad beat on the contrarian corner Mentioned in this Episode: Contact Derek Moore [email protected] Derek Moore's Book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547?ref_=nav_signin& Jay Pestrichelli Book Buy and Hedge https://amzn.to/3i2UZoL Sempres Augustus letter (see page 24 for where returns come from) PDF https://static.fmgsuite.com/media/documents/8b3d617a-4dc3-4dec-a621-23b1f6333833.pdf

Derek Moore explains in easy-to-understand terms what risk parity strategies are. Plus, he explains Harry Browne's Permanent Portfolio and Ray Dalio's All Weather Portfolio. How standard deviation is used and how some versions use leverage including futures to create risk parity weighted exposure. What are risk parity strategies? What are All Weather Portfolios? What is the Permanent Portfolio? Equalizing risk via standard historical deviation Using futures to create leveraged notional value What are the risks in a rising rate environment? Mentioned in this Episode: Contact Derek Moore [email protected] Derek Moore's Book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547?ref_=nav_signin&

Derek Moore relays how markets have done historically around geopolitical events. Plus, how being hedged allows investors to stay in the market. Interesting stats on markets 1-year later after drawdowns. It may surprise you. What the latest Russia/Ukraine situation means for inflation and interest rates. How markets perform around geopolitical events Does the Russia conflict increase inflation risks? Will the Fed raise interest rates less in 2022 now? Energy prices and inflation Commodities rallied in the short term After corrections how do markets do a year later? What percentage of corrections turn into bear markets? Market corrections vs bear markets Historical market returns after worst days, 3-months a year later Probability of Fed ¼ point vs ½ point rate hikes Mentioned in this Episode: Contact Derek Moore [email protected] Derek Moore's Book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547?ref_=nav_signin& Cleveland Fed Inflation Nowcast https://www.clevelandfed.org/our-research/indicators-and-data/inflation-nowcasting.aspx Atlanta Fed GDP Now https://www.atlantafed.org/cqer/research/gdpnow JP Morgan Guide to the markets https://am.jpmorgan.com/us/en/asset-management/protected/adv/insights/market-insights/guide-to-the-markets/ Fed Rate Probability Tool https://www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html CNN Business analysis on inflation with higher oil prices due to Russia Ukraine conflicthttps://www.cnn.com/2022/02/15/economy/russia-ukraine-inflation/index.html) Mohamed El-Erian from Allianz discusses impact of Russian Ukraine conflict on 2022 Fed interest rate moves https://www.youtube.com/watch?v=Yh-RKSbS_hI&t=22s Schwab market correction article showing corrections and bear markets since 1974 https://www.schwab.com/resource-center/insights/content/market-correction-what-does-it-mean Table with market shock events and stock market performance historical https://www.investopedia.com/solving-the-war-puzzle-4780889

Derek Moore explores how stock and bonds have done after the Fed starts raising rates. Is there any difference between when they raise greater than 1% compared to less than 1%? Why people should be surprised in March when February CPI numbers are released. More debate about what caused inflation. Plus, stocks continue to rerate with multiples contracting while earnings are up year to date. Examining stocks and bonds after the Fed starts raising rates Inflation causes February CPI released in March indicated to be high still by Cleveland Fed Nowcast Supply side vs demand side inflation How fiscal policy contributed to inflation How have high yield bonds done after the Fed starts raising rates Small caps vs large caps after the Fed starts raising rates Cleveland Fed Inflation Nowcast Atlanta Fed GDP Now Mentioned in this Episode: Contact Derek Moore [email protected] Derek Moore's Book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547?ref_=nav_signin& Surprising stock market returns by President, Senate, and House party make up podcast. https://podcasts.apple.com/us/podcast/surprising-historical-returns-by-presidents-senate/id1432836154?i=1000489545724 Cleveland Fed Inflation Nowcast https://www.clevelandfed.org/our-research/indicators-and-data/inflation-nowcasting.aspx Atlanta Fed GDP Now https://www.atlantafed.org/cqer/research/gdpnow JP Morgan Guide to the markets https://am.jpmorgan.com/us/en/asset-management/protected/adv/insights/market-insights/guide-to-the-markets/ Fed Rate Probability Tool https://www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html

Jay Pestrichelli, CEO ZEGA Financial, is back with Derek to say congratulations to our government debt reaching $30 Trillion! What are the ramifications of high debt levels? What the interest on that debt could be if rates rise? Does this put pressure on the Fed NOT to raise rates so much? Plus, interest in hedging at the highest levels since April of 2020. Is that a sign of contrarian optimism for the stock market? And contrarian corner is back where we each give some contrarian picks that go against the grain. US Debt – debt held by the public vs. overall debt How much of the budget do net interest payments make up? Average interest rate US pays on Treasury bonds Effect of rise of 1% in rates to interest payments on debt Political pressure to keep rates down? Treasury bonds do not have call provisions Investors are buying put options Hedging appetite highest since April of 2020 Contrarian Trades Emerging Market Value – Betting Against Too Many Rate Hikes Mentioned in this Episode: Contact Derek Moore [email protected] Derek Moore's Book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547?ref_=nav_signin& Jay Pestrichelli Book Buy and Hedge https://amzn.to/3uRbuMa Average maturity of US Treasury debt https://data.nasdaq.com/data/USTREASURY/AVMAT-average-maturity-of-total-outstanding-treasury-marketable-securities Average interest rate on US Treasuries https://www.treasurydirect.gov/govt/rates/avg/2022/2022_01.htm Marcel Benjamin explains how TIPS bonds work https://podcasts.apple.com/us/podcast/tips-inflation-protected-bonds-explained-interest-rate/id1432836154?i=1000535445537 JP Morgan Guide to the markets https://am.jpmorgan.com/us/en/asset-management/protected/adv/insights/market-insights/guide-to-the-markets/ Fed Rate Probability Tool https://www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html

Derek Moore discusses how the recent selloff is due to a multiple contraction rather than an earnings one. How 2021 and now so far in Q1 22 stocks are rerating by shrinking the multiple. Plus, what the shape of the yield curve is telling us in light of expected Fed action on interest rates. Driver of stock prices multiple declines vs earnings expansion PE Ratios coming down on a forward basis Earnings estimates on the S&P 500 Index for 2022 only shrink nominally What is the yield curve Yield curve steepness vs inversion What the yield curve is telling us about views on continued economic expansion Inversions before recessions Inflation breakeven rates Probability of Fed hikes updated Mentioned in this Episode: Contact Derek Moore [email protected] Derek Moore's Book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547?ref_=nav_signin& Marcel Benjamin explains how TIPS bonds work https://podcasts.apple.com/us/podcast/tips-inflation-protected-bonds-explained-interest-rate/id1432836154?i=1000535445537 JP Morgan Guide to the markets https://am.jpmorgan.com/us/en/asset-management/protected/adv/insights/market-insights/guide-to-the-markets/ Fed Rate Probability Tool https://www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html

Derek Moore discusses how markets have experienced selloffs but many times wind up positive at the end of the year. Plus, answering questions around small caps and the Russell 2000 Index ETF IWM PE Ratio. How the index differs from others in not including negative earnings in the computation. Then, watching latest inventory data reported this week. Intrayear stock market selloffs vs end of year total returns PE Ratios computation in Russell 2000 Index ETF vs S&P 500 Index PE calculations Most indexes just aggregate all companies earnings Index divisor to convert index market cap to index levels New inventory levels show GDP was buoyied by restocking during Q4 Mentioned in this Episode: Contact Derek Moore [email protected] Derek Moore's Book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547?ref_=nav_signin& JP Morgan Guide to the markets https://am.jpmorgan.com/us/en/asset-management/protected/adv/insights/market-insights/guide-to-the-markets/ Fed Rate Probability Tool https://www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html

Derek Moore discusses the recent market selloff while giving some perspective around this and others. Why is everyone waiting on pins and needles for the Jan 26th Jerome Powell Fed press conference. Plus, how markets retracing means valuations are coming back down, so long as earnings remain strong. Netflix meets on top line, and beats on bottom line but the streat was not a fan of guidance on subscribers. Probability of FED future rate hikes Netflix meats, beats, and dissapoints Anticipation grows for FED meeting Market re-rates valuation metrics and PE ratios lower after selloff Once again remember market predictions are often wrong Mentioned in this Episode: Contact Derek Moore [email protected] Derek Moore's Book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547?ref_=nav_signin& JP Morgan Guide to the markets https://am.jpmorgan.com/us/en/asset-management/protected/adv/insights/market-insights/guide-to-the-markets/ Fed Rate Probability Tool https://www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html

Derek Moore is joined once again by ZEGA CEO Jay Pestrichelli to give a few contrarian takes on markets. What are the inverse of obvious trades when inflation is perceived to be continuing? How commodities have run but gold has disappointed. Plus, why the Fed raising rates might increase costs. Yup, that's contrarian but we'll explain on the podcast. Good news bad news market reactions Contrarian trade ideas Are FED interest rate expectations too much? Inflation continues as calls for the FED to do something increase Will raising interest rates actually do anything for inflation? What if raising rates will cause more inflation? Well intentioned government programs have unintended consequences The Cobra Problem Bad Superbowl Predictions The return of Ozark show on Netflix Mentioned in this Episode: Contact Derek Moore [email protected] Derek Moore's Book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547?ref_=nav_signin& Jay Pestrichelli Book Buy and Hedge https://amzn.to/3nuzHUg www.zegafinancial.com Podcast Words and Numbers Supply Chain Insider Describes the issues https://podcasts.apple.com/us/podcast/episode-256-an-insiders-view-of-the-supply-chain/id1237781005?i=1000547016908 Podcast explaining overnight reverse repurchase agreements https://podcasts.apple.com/au/podcast/what-are-reverse-repos-and-repos-fed-enters-overnight/id1432836154?i=1000523659106 Fed Rate Probability Tool https://www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html

Derek Moore explains what was in those Fed minutes released last week that stirred up selling in the markets. What does balance sheet normalization mean? When are forecasters expecting the first interest rate hike? Is the Fed worried about the yield curve? Why did the Fed Minutes release rile markets Increasing the probability of the normalization of rate policy Removing accommodation by reducing the size of the balance sheet. What is balance sheet runoff? Fed comments on the shape of the yield curve Using Overnight Reverse Repo Market to help smooth policy normalization When are Fed meeting minutes released? When are the next Fed Meetings scheduled? Mentioned in this Episode: Contact Derek Moore [email protected] Derek Moore's Book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547?ref_=nav_signin& Podcast explaining overnight reverse repurchase agreements https://podcasts.apple.com/au/podcast/what-are-reverse-repos-and-repos-fed-enters-overnight/id1432836154?i=1000523659106 Fed Rate Probability Tool https://www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html

Derek Moore reviews asset classes like stocks, bonds, bitcoin, and gold. What investors thought would be a no brainer with higher inflation didn't work. Plus, Derek goes back ten years and reads some bearish doom and gloom predictions for crashes that never came true. How wrong where they and why you maybe shouldn't listen to them. Instead just invest but be hedged. 2021 Inflation hedges like gold lost money in 2021. Why the obvisous short bonds and buy gold showed less than steller returns despite higher inflation. How to do specific google searches by year to see how prognostications were wrong. Those saying this was the worst market conditions in 2012 were way wrong. What you should do instead. How to tune out the noise, be invested, but be hedged encase markets selloff. Without naming names, Derek reads some quotes on impending crashes from some of the same people making the same predictions now. Mentioned in this Episode: Contact Derek Moore [email protected] Derek Moore's Book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547?ref_=nav_signin& Jay and Derek's lighthearted 2022 market predictions podcast https://podcasts.apple.com/us/podcast/2022-market-predictions/id1432836154?i=1000546252301 How have stocks done during periods of high inflation? https://podcasts.apple.com/us/podcast/stocks-during-high-inflation/id1432836154?i=1000542624663 Inflation deep dive https://podcasts.apple.com/us/podcast/inflation-deep-dive/id1432836154?i=1000541759655 Marcel Benjamin explains TIPS Treasury Inflation Protected Bonds https://podcasts.apple.com/us/podcast/tips-inflation-protected-bonds-explained-interest-rate/id1432836154?i=1000535445537

Jay Pestrichelli joins Derek Moore to review some 2022 market predictions. You shouldn't trade of these! Make sure to listen in a year to see what they got right, and what they got wrong. 2022 S&P 500 Index Year End Predictions 2022 Inflation 2022 Earnings on the S&P 500 Index Will the S&P 500 see multiple expansion, earnings growth, or both? Plus, Bitcoin, Oil, and Gold. Will there be a recession in 2022? What will GDP growth be in 2022? Mentioned in this Episode: Contact Derek Moore [email protected] Derek Moore's Book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547?ref_=nav_signin& Jay Pestrichelli's Book Buy and Hedge https://amzn.to/3HexeER Podcast Explaining multiple expansion vs earnings expansion in stock price multiples https://podcasts.apple.com/us/podcast/desconstructing-stock-price-earnings-multiple-expansion/id1432836154?i=1000545436987 Podcast stocks during high inflationary periods https://podcasts.apple.com/us/podcast/stocks-during-high-inflation/id1432836154?i=1000542624663

Derek Moore responds to market pundits making 2022 predictions where they examine whether stock prices will see moves diven by changes in earnings vs PE multiples expanding. Also covered will be effect share buybacks have on earnings per share EPS. Then he compares Amazon and Apple forward multiples and share counts. PE Ratio EPS Earnings per share Calculate Market Cap Multiple expansion versus earnings expansion Forward PE vs PE Ratio S&P 500 2021 price driven by earnings expansion while multiples contracted Amazon AMZN comparing 2020 earnings to 2005 price along with share counts Apple has seen a 37% reduction in shares outstanding due to buybacks over 10 years Mentioned in this Episode: Contact Derek Moore [email protected] Derek Moore's Book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547?ref_=nav_signin&

Derek Moore reviews the range of potential moves the Federal Reserve may take given rising inflation. Will the Fed reduce their monthly purchases? What does the Fed Fund probability tracker show the market is expecting interest rates to be? What about the trillions of dollars the Fed is doing in the Overnight Reverse Repo Market? Monthly Fed purchases of MBS and Treasuries $1.5 Trillion in Overnight Reverse Repos Fed Rate Hike Probabilities Chairman Jerome Powell gets more hawkish? Inflation effect on interest rates? Effective Fed Funds Rate Will raising inflation actually reduce inflation? Inflation nowcast indicates higher inflation in December Mentioned in this Episode: Contact Derek Moore [email protected] Previous Podcast: What are Reverse Repos? https://podcasts.apple.com/au/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_=nav_signin& Federal Reserve Balance Sheet h.4.1 https://www.federalreserve.gov/releases/h41/current/ Effective Funds Rate NY Fed https://www.newyorkfed.org/markets/reference-rates/effr Fed Rate Probability CME site https://www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html# Inflation Nowcast Cleveland Fed https://www.clevelandfed.org/our-research/indicators-and-data/inflation-nowcasting.aspx Fed Overnight Reverse Repurchase Activity https://fred.stlouisfed.org/series/DTB3#0 3-Month Treasury Bill Rates https://fred.stlouisfed.org/series/TB3MS

Jay Pestrichelli is back to co-host with Derek where they simplify risk measures like Alpha and Sharpe. Then they discuss the market drop that started during the short post Thanksgiving day session. Later an inflation check in, corporate profit margins at multi-decade highs, the yield curve flattening, and oil prices. Markets pullback from highs Market valuations Alpha explained Sharpe Ratio explained Comparing portfolio managers through risk adjusted returns Comparison benchmarks Market moves during short staffed holiday trading sessions SPR Strategic Petroleum Reserve release impact Oil inventories and demand The yield curve continues to flatten what does it suggest? Profit margins his multi-decade highs even during inflation Mentioned in this Episode: Contact Derek Moore [email protected] Derek Moore's Book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547?ref_=nav_signin& JP Morgan Guide to the Markets https://am.jpmorgan.com/us/en/asset-management/protected/adv/insights/market-insights/guide-to-the-markets/ Jay Pestrichelli's Book Buy and Hedge https://amzn.to/3EqSTc6

Derek reviews some key market themes including things to watch on corporate earnings, profit margins and more. Then he discusses the current situation around oil rig counts and inventories versus demand. Later Derek talks about how government responses such as lockdowns can impact the economy. S&P 500 Earnings Profit Margins at Decade Highs Multiple expansion Earnings expansion Difference between multiple expansion and earnings growth JP Morgan Guide to the Markets data What is the market risk of Covid? Earnings growth Market valuations Mentioned in this Episode: Contact Derek Moore [email protected] Derek Moore's Book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547?ref_=nav_signin& JP Morgan Guide to the Markets https://am.jpmorgan.com/us/en/asset-management/protected/adv/insights/market-insights/guide-to-the-markets/

Derek is back to review data put out by OSAM showing periods of severe inflation, high inflation, and how stocks have done historically. How have bonds done during periods of high inflation? How common is severe or high inflation? Severe Inflation High Inflatipon Moderate Inflation or Fed Target Inflation Low Inflation Deflation How to calculate real returns after inflation Stocks and bonds performance during inflationary periods How common is high or severe inflation Looking at stock returns during the late 1970s and early 1980s Value of being hedged vs traditional 60/40 portfolios during high inflation Mentioned in this Episode: Contact Derek Moore [email protected] Derek Moore's Book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547?ref_=nav_signin& OSAM Historical Real Returns Stocks and Bonds During Various Inflation Regimes https://www.osam.com/Commentary/inflation-and-the-us-bonds-and-stock-markets

Derek is back to discuss the recent media reports of highest inflation in 30 years. What is true and what isn't? Plus he takes a deeper dive into inflation components, inflation sentiment effecting consumer beheavior, and sticky vs flexible inflation. Inflation at 30 year highs Today's inflation vs late seventies and early eighties inflation Flexible inflation (CPI) vs Sticky inflation (CPI) What makes up the CPI index Year to date 5.8% inflation in 2021 How many years have we seen deflation Michigan Consumer Sentiment release 1 year inflation expectations vs 5 year 5 year treasury breakeven inflation rates surging Consumer behavior around deflationary and inflationary periods Mentioned in this Episode: Contact Derek Moore [email protected] Derek Moore's Book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547?ref_=nav_signin& Michigan Consumer Sentiment Inflation Expectations http://www.sca.isr.umich.edu/tables.html CPI All Items annual Federal Reserve Bank of St. Louis https://fred.stlouisfed.org/series/CPIAUCSL#0 Flexible CPI vs Sticky CPI https://www.atlantafed.org/research/inflationproject/stickyprice BLS full PDF release CPI https://www.bls.gov/cpi/

Jay Pestrichelli, CEO of ZEGA Financial, is back with Derek to discuss Nassim Talib's comments that Bitcoin is another Tulip Bubble. Plus, the Fed announced a taper so now what? How companies putting Bitcoin on their balance sheet effects volatility. Nassim Talib's comments about bitcoin being another tulip bubble What was the Tulip Bubble? Cyrpto bleeding into S&P earnings and volatility Fed Tapering, Wage Growth vs Inflation Doom and gloomers are wrong so just be hedged. Mentioned in this Episode: Contact Derek Moore [email protected] Derek Moore's Book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547?ref_=nav_signin& Jay Pestrichelli's Book Buy and Hedge https://amzn.to/3CUX134 Podcast What Happens if You Miss the Two Best Days of the Market Each Year? https://podcasts.apple.com/us/podcast/buy-and-hedge-protect-yourself-from-yourself-miss-two/id1432836154?i=1000525355779

Derek is back to explain why homes may not be as unaffordable compared to 30 years ago. What the media may leave out when talking about home prices and inflation. Plus, quick update on container shipping prices and the week ahead for several central banks. What the media gets wrong about home prices After inflation, home prices haven't risen quite as much Low rates mean more house Challenge with extending the terms on auto loans Importance of annualizing data Down payments not as bad? Comapring home appreciation to income gains Container shipping costs are moving lower Central banks interest rate decisiosn coming Mentioned in this Episode: Contact Derek Moore [email protected] Derek Moore's Book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547?ref_=nav_signin& Are homes more affordable after accounting for inflation? https://realestatedecoded.com/real-monthly-mortgage-payment-home-price-index/ Real median income US https://fred.stlouisfed.org/series/MEHOINUSA672N Real median home prices historical https://fred.stlouisfed.org/series/MSPUS

Derek is back to explain why inflation normalizing does not exactly mean lower prices. Jack Dorsey says hyperinflation is coming. What is hyperinflation and is he right? And who's right the blue chip analysts or Atlanta FED's GDP nowcast? Jack Dorsey says hyperinflation coming. Inflation compounds on itself. Illustrating how damaging 1970s inflation was Compare prices with a normalized inflation rate vs 1970s and early 1980s actual What is hyperinflation GDP Nowcast by the Atlanta Fed comes in lower than blue chip consensus What is the GDP Nowcast 100 Trillion Dollar Zimbabwae Bill Mentioned in this Episode: Contact Derek Moore [email protected] Derek Moore's Book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547?ref_=nav_signin& GDP Nowcast Atlanta FED https://www.atlantafed.org/cqer/research/gdpnow?panel=4 Inflation Nowcast Cleveland FED https://www.clevelandfed.org/our-research/indicators-and-data/inflation-nowcasting.aspx

Jay and Derek are back to together on the podcast to go back and forth on current event. Jamie Dimon thoughts on crypto COLO Adjustment Jay guest starring on Fox Mornings And Marie (well atleast on a panel discussion) Doing financial TV as a guest CPI latest numbers Container Shipping prices finally tick lower for the first time. Tech earnings releases How Tech companies perform before and after earnings releases Mentioned in this Episode: Contact Derek Moore [email protected] ZEGA www.zegafinancial.com Derek Moore's Book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547?ref_=nav_signin& Jay Pestrichelli's Book Buy and Hedge https://www.amazon.com/Buy-Hedge-Rules-Investing-Minyanville/dp/0132825244?&linkCode=ll1&tag=tradesurfer-20&linkId=46ffc6b807e0c7f3d2e66a32790241e2&language=en_US&ref_=as_li_ss_tl

Derek Moore is back to discuss whether the Fed has any cover to not pull back on their monthly asset purchases. Plus, what is the employment situation? What about inflation and supply side supply chains? Are we nearing Stagflation? This and more on the program. Fed Taper Fed Asset Purchases Inflation Container Shipping Supply Side Issues GDP Now failing Stagflation US Treasuries Close Above 1.6% Unemployment Labor Participation Rate Mentioned in this Episode: Contact Derek [email protected] Derek Moore's Book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547?ref_=nav_signin& Atlanta Fed GDP Nowcast https://www.atlantafed.org/cqer/research/gdpnow?panel=4 Cleveland Fed Inflation Nowcast https://www.clevelandfed.org/our-research/indicators-and-data/inflation-nowcasting.aspx

Derek Moore is back to discuss political risk to markets and interest rates. What exactly is the budget reconciliation process? What is the debt ceiling and is there really a risk of default? What about the filibuster? Debt Ceiling Budget Reconciliation Process Continuing Resolution Inflation Supply Chain Issues Container Shipping Issues Infrastructure Bill $3.2 Trillion Budget Bill Political Risk to Markets Inflation Risk Interest Rates reaction to debt ceiling US Bond Downgrades US Debt Default Treasury Secretary Yellen Default Risk Senate Filibuster Mentioned in this Episode: Contact Derek [email protected] Derek Moore's Book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547?ref_=nav_signin& Budget Reconciliation rules https://budget.house.gov/publications/fact-sheet/budget-reconciliation-basics History of US Debt Ceiling https://en.wikipedia.org/wiki/History_of_United_States_debt_ceiling

Jay Pestrichelli, CEO of ZEGA Financial is back to discuss key market themes including comparing September to other months. Guess Which month is the worst? Evergrande in China and what is going on with their bonds. The Fed Taper and interest rates. Economy and GDP growth slowing? Housing starts along trendline. Plus, myths about portfolio hedging. Evergrande in China China's Three Red Lines Debt Policy Evergrande bond prices and ratings are pricing in defaults Evergrande is not new. How long has price been telling investors there is an issue? The Fed likely to Taper and effects on markets and interest rates Stagflation? September is the worst month historically. Sell in May and go away a misnomer? Hedging myths Everything you think you know about hedging is wrong Mentioned in this Episode: Contact Derek [email protected] Derek Moore's Book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547?ref_=nav_signin& What is China's 3 Red lines Policy https://www.ubs.com/global/en/asset-management/insights/china/2021/china-three-red-lines.html Jay Pestrichelli's book Buy and Hedge https://amzn.to/3o6QGgm Everything You Think You Know About Hedging is Wrong article https://zegafinancial.com/blog/everything-you-think-you-know-about-hedging-is-wrong Understanding Bonds Interest Rate Risk and TIPS Bonds Treasury Inflation Protected Securitieshttps://podcasts.apple.com/us/podcast/tips-inflation-protected-bonds-explained-interest-rate/id1432836154?i=1000535445537 Talking Inflation, All-Time Market Highs, Interest Rates, Covid, Housing, & More https://podcasts.apple.com/us/podcast/talking-inflation-all-time-market-highs-interest-rates/id1432836154?i=1000533456019

Google web searches for the term Stagflation are spiking. More pundits are mentioning the S word. So what is Stagflation and what should be looking at to tell whether this is a real risk to the economy? What is stagflation How to measure slowing growth How to find CPI inflation data Where to follow unemployment and wage growth Why the Fed would be put in a box during stagflation Stagflation causes including supply side issues Fiscal stimulus the wrong thing if its supply side Mentioned in this Episode: Contact Derek [email protected] Derek Moore's Book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547?ref_=nav_signin& TIPS Inflation Indexed Treasury Bonds https://open.spotify.com/episode/0wKePdiHHZ89B2hVajRb6C?si=_4JZCIQGS5iIwJDIKzMwyQ&dl_branch=1 Supply Side vs Demand Side Inflation https://open.spotify.com/episode/5iwBwhxdczXuFPPVuZ4tup

Marcel Benjamin is back on the show for another appearance to dig into the details around TIPS Bonds (Treasury Inflation Protected Securities). How they work and why they are misunderstood by many. Plus, we discuss interest rate risk comparing high and low interest rate environments. Yup, even a little bond convexity primer! This was a great conversation that gives anyone a much greater depth of knowledge on an asset class that is a little more complicated. T Bonds and Bills: lower interest rates, increased duration and sensitivity to changes in interest rates Examples of potential changes in market value (risk) when interest rates go up or down Its about looking at the series of cash flows What are TIPS (Treasury Inflation Protected Securities) Bonds? How are TIPS Bonds designed to be adjusted for inflation based on the CPI? Size of the TIPS Bond market Primary risks include interest rate changes and deflation. Breakeven rates a view into market view on inflation 5-Year/ 5-Year Forward Rates Auctions going off at negative yield to maturity Comparing 2020 to 2008 break evens Bond Convexity primer Mortgage bonds unique convexity due to pre-pays by homeowners Duration over the years on the US AGG (Aggregate Bond) Index Mentioned in this Episode: Marcel Benjamin's prior podcast appearance covering High Yield Bonds https://brokenpiechart.libsyn.com/marcel-benjamin-high-yield-bonds-explained-what-are-zombie-companies Information on State Street Global Advisors SPDR fixed income products https://www.ssga.com/us/en/intermediary/etfs/capabilities/simplify-investing-with-fixed-income-etfs/sdpr-fixed-income-etfs Contact Derek Moore [email protected] Derek Moore's Book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547?ref_=nav_signin&

Derek goes beyond the headlines to look under the hood of the labor market, jobs, and unemployment. Plus, he reviews the container shipping issues and port delays, semiconductors now delayed over 20 weeks. Finally, he discusses whether the government stimulus for a drop in demand might have miscalculated the recession. Instead, what if it's a supply side issue where falling supply and rising prices is the regime? Both demand shock and supply shock are covered so you can talk to your friends about it. Transitory or Non-Transitory case for inflation Container shipping issues with inflation The Fed interest rate tapers and rate decisions Supply Side Shock Demand Side Shock Wage growth Labor force participation rates Government transfer payments (social programs) growth Mentioned in this Episode: Contact Derek [email protected] Follow Derek's blog articles on the ZEGA site https://zegafinancial.com/blog Derek Moore's Book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547?ref_=nav_signin& Inflation-Markets at All-time Highs, Interest Rates, Covid and the Markets, Afghanistan https://podcasts.apple.com/us/podcast/talking-inflation-all-time-market-highs-interest-rates/id1432836154?i=1000533456019 Sticky CPI vs Flexible CPI https://podcasts.apple.com/us/podcast/how-is-inflation-measured-sticky-cpi-vs-flexible-cpi/id1432836154?i=1000521909707 What are Repos and Reverse Repos https://podcasts.apple.com/au/podcast/what-are-reverse-repos-and-repos-fed-enters-overnight/id1432836154?i=1000523659106

Jay Pestrichelli, CEO of ZEGA Financial, is back to talk a walk around the markets to discuss both sides of inflation debate, interesting numbers around all-time highs, hedging, the FED, Housing Prices. Jay turns the tables and hosts asking Derek about the case for and against inflation being transitory. Transitory or Non-Transitory case for inflation Container shipping issues with inflation The Fed interest rate tapers and rate decisions Market at All-time highs Just best Hedge Housing Prices big deal nor no-deal? Demand for Treasuries Reverse Repos and the Fed Covid risks in the economy Afghanistan risk to markets Mentioned in this Episode: Contact Derek [email protected] Follow Derek's blog articles on the ZEGA site https://zegafinancial.com/blog Derek Moore's Book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547?ref_=nav_signin& Gamestop short squeeze and wall street bets podcast https://podcasts.apple.com/us/podcast/gamestop-short-squeeze-by-reddit-wall-street-bets-traders/id1432836154?i=1000507187446 What are Repos and Reverse Repos https://podcasts.apple.com/au/podcast/what-are-reverse-repos-and-repos-fed-enters-overnight/id1432836154?i=1000523659106 How much Bitcoin or Ethereum to hold https://podcasts.apple.com/au/podcast/how-much-ethereum-and-bitcoin-should-i-have-in-my-portfolio/id1432836154?i=1000520947855

Traderscoach.com founder Bennett McDowell joins Derek Moore. They hit the record button and what ensues is a free-flowing discussion around what common themes they see from successful investors and trades. Plus, what common mistakes they see repeated by those struggling to find their trading voice. Later they discuss trading live in front of an audience in a trading challenge. Favorite trading movies. And writing and publishing investment books. Bennett McDowell and Derek Moore reminisce about their days on air doing the Market Huddles Discussion around common mistakes traders and investors make repeatedly What traits successful traders make What percentage of traders make money? Doing presentations at the Traders Expos in Las Vegas and New York Participating in a live trading challenge Favorite trading movies What percentage of asset to put into trading versus your larger investing assets? Writing investment books Derek's favorite book by Bennett McDowell Impact of technology on investing Tracking your trading How you can be wrong a lot and still win at trading Risk of ruin tables Process of writing financial books Mentioned in this Episode: Contact Derek [email protected] Bennett McDowell www.traderscoach.com Click Here for Bennett's free PDF article on money management, trade size, and risk of ruinhttps://ea125.isrefer.com/go/mmshare/jeanmcd/ Bennett McDowell's Books on Amazon https://www.amazon.com/Bennett-McDowell/e/B001JS8NWY%3Fref=dbs_a_mng_rwt_scns_share Derek Moore's Book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547?ref_=nav_signin& Day Trading for A Living Podast Around Brazil Study Showing 97% Don't Make Money https://www.iheart.com/podcast/269-broken-pie-chart-29878781/episode/day-trading-for-a-living-68947906/ Gamestop short squeeze and wall street bets podcast https://podcasts.apple.com/us/podcast/gamestop-short-squeeze-by-reddit-wall-street-bets-traders/id1432836154?i=1000507187446

You hear it all the time: start early contributing money to investment accounts. But just how big of a difference does it make? What about doing a monthly budget? Are detailed budgets more of a hassle than they are worth? How much money at various ages needed to contribute to build wealth? Why some budgets may not be beneficial The big items like cars, rent, and mortgages make an impact not your Netflix account What if you invested the difference? How to review your statements to find things you don't want or need anymore Look around your house to find things to fund your account Mentioned in this Episode: Contact Derek [email protected] Derek Moore's Book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547?ref_=nav_signin& Netflix is not making you broke https://open.spotify.com/episode/06EbLDvG2oUxRlYILF0ngH How to find money around your house to fund your investment accounts https://open.spotify.com/episode/4pqFDUwNV8wmVPyJUbMa1e

You often hear people quote historical stock and bond returns. But are they useful to investors? What lessons can you take from them to help with your portfolio construction? What challenges do historical investment returns have concerning dividend reinvestment and commissions? What about bond historical averages given our low-interest-rate environment? S&P 500 Index Total Returns 1928- 2020 History of index funds and dividend reinvestment Treasury Bonds historical returns 1928-2020 Probabilities based on historical stock returns S&P 500 Index Total Return by decade Sources for historical return data Mentioned in this Episode: Derek Moore's Book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547?ref_=nav_signin& Robert Shiller historical market data http://www.econ.yale.edu/~shiller/data.htm Aswath Damadoran website, blog, and data https://pages.stern.nyu.edu/~adamodar/ Robert Shiller book Irrational Exuberance https://www.amazon.com/Irrational-Exuberance-Revised-Expanded-Third/dp/0691173125?_encoding=UTF8&qid=1628453580&sr=8-1&linkCode=ll1&tag=tradesurfer-20&linkId=eea68424f97b1bf760a2d5bc1df2120a&language=en_US&ref_=as_li_ss_tl Jeremy Seigel book Stocks for the Long Run https://www.amazon.com/Stocks-Long-Run-Definitive-Investment-dp-0071800514/dp/0071800514?_encoding=UTF8&me=&qid=&linkCode=ll1&tag=tradesurfer-20&linkId=e34a4e3f2b776fcd7a89fa9e1297e9cc&language=en_US&ref_=as_li_ss_tl

Watch CNBC or Fox Business for a short while and you are likely to see predictions on interest rates. But how would you see for yourself what the various futures markets are implying for future interest rates? Learn how you can look at the Fed Funds, Eurodollar, SOFR (Secured Overnight Funding Rate), and soon BSBY Rate futures to see into the future what market participants are currently thinking. Plus, many of you have variable-rate mortgages or home equity loans that are tied to the Libor Rate, or now SOFR or BSBY. See how to quickly recognize what the implied interest rates are on these key metrics. How to calculate implied future fed funds rate CME Fed Funds Probability Tracker SOFR Secured Overnight Funding Rate Eurodollar Futures and implied 3-month Libor rate BSBY Rate based on CDs, Commercial Paper, Bank Deposits USD, Short term bank bond trades Fed Funds Futures SOFR Rate Futures Eurodollar Futures Mentioned in this Episode: Derek Moore's Book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547?ref_=nav_signin& Eurodollar futures chain https://www.cmegroup.com/markets/interest-rates/stirs/eurodollar.quotes.html SOFR Futures rates CME https://www.cmegroup.com/markets/interest-rates/stirs/three-month-sofr.html CME FedWatch Probability Tool and Fund Funds Futures by Fed Meeting Date https://www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html