Broken Pie Chart
Derek Moore
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Derek Moore and Jay Pestrichelli, CEO of ZEGA Financial, join up once again to discuss the drop in the VIX Index off the highs. How S&P 500 2024 targets are showing up and why investors may not care. Labor force participation turned down so what does that mean if anything? Finally, Simplifying what synthetic long stock strategies are and synthetic long stock with covered calls. What are the features and benefits? How are they like just owning stock and or owning stock with a covered call? What investors give up by selling covered calls in exchange for additional income.
2024 S&P 500 Year End Price Targets from the investment banks
Why investors should probably ignore market predictions
Largest VIX Index 7-week declines and whether its significant or no
Unemployment remains low but labor force participation move lower
What does Labor Force participation measure?
What are synthetic option positions?
What are synthetic long stock with a covered call position?
What are the benefits of using synthetic options to build market exposure?
Mentioned in this Episode:
VIX Index Goes Nowhere | Cheap Puts to Hedge? |Cheaper to Rent Than Buy? | Markets During Presidential Election Years https://podcasts.apple.com/us/podcast/vix-index-goes-nowhere-cheap-puts-to-hedge-cheaper/id1432836154?i=1000637335338
Dave Ramsey Wrong? | Huge VIX Options Bets | S&P 500 Seasonality | When Does Government Debt Become a Problem? https://podcasts.apple.com/us/podcast/dave-ramsey-wrong-huge-vix-options-bets-s-p-500-seasonality/id1432836154?i=1000636559171
0DTE Options Analysis| Inflation Coming Back? | Strong US Dollar Impact https://podcasts.apple.com/us/podcast/0dte-options-analysis-inflation-coming-back-strong/id1432836154?i=1000628157831
Jay Pestrichelli’s book Buy and Hedge https://amzn.to/3jQYgMt
Derek’s new book on public speaking Effortless Public Speaking https://amzn.to/3hL1Mag
Derek Moore’s book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547/ref=sr_1_1?keywords=broken+pie+chart&qid=1558722226&s=books&sr=1-1-catcorr
Contact Derek [email protected]
04/14/24 • 56 min
Derek Moore and Jay Pestrichelli, CEO of ZEGA Financial, discuss Friday’s selloff. So, was it all the readjustment of Fed rate cut expectations? Is CPI Inflation putting the Fed in a box? Michael Saylor says Bitcoin is better than Gold. The rally in Gold that everyone is sleeping on. CPI Supercore trending higher showing services not goods are the culprit. Later they examine the VIX Futures curve as the front months rise. Finally, they talk about the continued bear market due to higher rates on 10-to-30-year US Treasuries from the March 2020 all-time highs against the stock market and high yield.
Michael Saylor Bitcoin vs Gold
Market selloff reasons
High Yield bonds vs equities
CPI Supercore trending higher lately.
CPI Core vs CPI year over year
VIX futures curve and explaining difficulty in picking how to play expected rise in volatility
US 30-Year Treasuries made all-time high in March of 2020 but down -44% since
What would it take for bond holders to get to break even?
Stealth rally in Gold and comparing buying physical gold to gold ETFs GLD and GLDM
Comparing inflation outlook between Democrats, Republics, and Independents
Earnings season arrives while banks reported but talked NIM net interest margins suffering
Mentioned in this Episode
Podcast: Explaining How and Why Bonds Make or Lose Money https://open.spotify.com/episode/3AUT2DVbHfEQyJglpe70nP?si=wIFug8IfR1-sb_bX03qNHA
Previous Week’s Podcast:
Buying At All-time Highs Better? | S&P 500 Returns After Last Hike | Developed International Beats the S&P | How To Tell Whether Options Are Expensive https://podcasts.apple.com/us/podcast/buying-at-all-time-highs-better-s-p-500-returns-after/id1432836154?i=1000651729073
Jay Pestrichelli’s book Buy and Hedge https://amzn.to/3jQYgMt
Derek’s new book on public speaking Effortless Public Speaking https://amzn.to/3hL1Mag
Derek Moore’s book Broken Pie Chart https://amzn.to/3S8ADNT
Contact Derek [email protected]
Jay Powell & The “Good Ship Transitory” | Price Caps Proposed by Politicians | Huge Employment Revisions | US Dollar Breaking Down?
Broken Pie Chart
08/25/24 • 43 min
Derek Moore and Jay Pestrichelli once again are here to break down the Jay Powell Jackson Hole statement and the market reaction including latest interest rate projections. Then they comment on the idea proposed by politicians of price caps and whether companies are making record profits based on net profit margins. Later they discussed the huge revision lower in employment number in the establishment survey and whether it’s a big deal or now and why the difference between the monthly releases and the first preliminary annual revision. Finally, they discuss the positive of the US Dollar potentially breaking down for US companies and the latest in volatility markets.
Jay Powell Fed signals the time is now to change policy
The “Goodship Transitory” and Jay Powell
Fed funds interest rate projections
Whether the Fed raising or lowering interest rates made any impact
Huge first preliminary revision by 800k in the establishment employment survey
What Goldman Sachs cited for the reason in the revisions in data
Difference between the monthly employment numbers and these annual revisions
US Dollar index and how a lower dollar helps multinational US company earnings
Politicians are talking price caps and why those never work
Examining a few companies net profit margins to see if they are actually making record profits
Volatility markets including the VIX and VVIX
Mentioned in this Episode
Fastest Correction Ever? | VIX Index Collapse Post Spike | Will the Fed Push Back on a 50 bps Interest Rate Cut? | Latest Inflation Analysis and Soft, Hard, or No Landing?
https://open.spotify.com/episode/1L5RNtfOKAc59TtOODf1dK?si=dzldc_NFSuKuve7nkZc4Ig
Derek Moore’s book Broken Pie Chart https://amzn.to/3S8ADNT
Jay Pestrichelli’s book Buy and Hedge https://amzn.to/3jQYgMt
Derek’s new book on public speaking Effortless Public Speaking https://amzn.to/3hL1Mag
Contact Derek [email protected]
Derek Moore and Jay Pestrichelli, CEO of ZEGA Financial, are back to explore surprising data about buying the market at all-time highs vs any other day. Plus, how do markets and bonds perform post the last fed hike? Later, while you were sleeping developed international markets outperform U.S. markets. And listener question “who do I know what a good price for an option is?”
What is a high or low price for an option?
Components that make up and drive option prices
Market performance post last fed rate hike
Bond market performance after last fed rate hike
MSCI EAFE developed markets international outperforms U.S. large cap
Why people aren’t buying the inflation is lower narrative
S&P 500 earnings estimates continue to rise
Forward PE multiple on the S&P 500 dynamic
Unemployment drops as more people are working and in the labor force
How does immigration if at all impact employment data?
How far $100 gets you at the grocery store today vs 2019
Understanding the cumulative effects of inflation vs the year over year percent change
Why high prices aren’t going back down as only the rate of future change adjusts
Mentioned in this Episode
How far does $100 get you at the grocery store post inflation? https://www.wsj.com/business/retail/inflation-food-price-of-groceries-2024-5010700b?mod=hp_lead_pos7
Previous Week’s Podcast:
Most Record Highs Since 2013 | The Fed No Rush to Cut? | VVIX and VIX Super Quiet | Value vs Growth | Cocoa More Valuable than Gold? https://podcasts.apple.com/us/podcast/most-record-highs-since-2013-the-fed-no-rush-to-cut/id1432836154?i=1000651003743
Jay Pestrichelli’s book Buy and Hedge https://amzn.to/3jQYgMt
Derek’s new book on public speaking Effortless Public Speaking https://amzn.to/3hL1Mag
Derek Moore’s book Broken Pie Chart https://amzn.to/3S8ADNT
Contact Derek [email protected]
Nvidia To the Moon | Implied Volatility and Earnings | Earnings and Markets Have Low Correlations? | Nvidia Cheap?
Broken Pie Chart
02/25/24 • 46 min
Derek Moore and Jay Pestrichelli, CEO of ZEGA Financial, discuss Nvidia’s beat on earnings, their march towards $2trillion market cap, and how as earnings forecasts rise, even though the stock has made new highs, forward PE ratios go lower. Then, they explore what the options market via implied volatility was forecasting for an Nvidia move post earnings. Later, they review a comparison between the S&P 500 Index annual return vs the EPS growth to see if there is any relationship. Hint, it’s not too correlated even when they compare the current year market performance against the 1 year forward actual earnings. All that and more will be explained including some recommendations.
Nvida’s stock is rising while its forward PE just got cheaper
Nvidia’s recent earnings beat including EPS growth, revenue growth, and gross and net margins
What would it take for Nvida to overtake Microsoft as the largest company in the S&P 500?
Implied move post earnings based on the implied volatility of the options market
Price of the at the money long straddle on Nvidia the afternoon of earnings
Regression analysis of S&P 500 Index annual return vs EPS growth
Correlations between market returns and earnings growth
Comparing correlations with same year market returns vs same year and 1 year forward EPS
Markets are forward looking
Probability of Nvidia reaching $3.06T in market cap in one year per options market
Mentioned in this Episode:
Where returns come from see start of page 23 in Semper Augustus group letter
https://static.fmgsuite.com/media/documents/db64b928-53d6-43a9-a4d0-a9d2f69f76ba.pdf
Previous Week’s Podcast:
Put & Call Implied Volatility Mismatch? | US Dollar vs S&P 500 Correlation | Sticky Inflation | Japan Recession | Explaining Why Stocks Go Up (or down)https://podcasts.apple.com/us/podcast/put-call-implied-volatility-mismatch-us-dollar-vs-s/id1432836154?i=1000645873203
Jay Pestrichelli’s book Buy and Hedge https://amzn.to/3jQYgMt
Derek’s new book on public speaking Effortless Public Speaking https://amzn.to/3hL1Mag
Derek Moore’s book Broken Pie Chart https://amzn.to/3S8ADNT
Contact Derek [email protected]
Explaining Telsa Implied Volatility | Bitcoin Selloff Post Spot ETF | What History Tells Us About Election Year Returns
Broken Pie Chart
01/28/24 • 43 min
Derek Moore and Jay Pestrichelli, CEO of ZEGA Financial, are it at once again where they analyze Tesla’s implied volatility right before earnings vs what happened. Did the option’s market misprice premiums? Also, in the episode they talk about Bitcoin’s drop as a sell the news buy the rumor example while Derek argues that Bitcoin’s volatility make it unusable as a currency to transact business. Later they dive into some data showing that when markets are up 20% the year before the election, election years historically have never been down and does that mean anything for 2024? Finally, they talk about China’s selloff relative to US markets and how everyone thought emerging markets would be the thing in 2023.
Bitcoin in a bear market drawing down greater than 20% from pre-ETF launch high
Bitcoin at least in the short term seems like people bought the rumor but are selling the news
Can Bitcoin be a currency if it drops 20% within a month?
What is an option’s implied volatility mean vs an option’s historical volatility
Looking at the price of the at the money straddle on Tesla right before earnings
How to figure out what the options market is pricing in for a 1 standard deviation move
Post Tesla earnings did the markets accurately price in how much Tesla moved after earnings?
2023 was up > 20% so what does that mean for election year based on some data?
Election year and the markets
China’s stock market gets a little rocky but no bearing on US markets?
Emerging markets were picked at the beginning of 2023 to close the gap on US markets
Emerging markets still underperforming the S&P 500 Index
Explaining how companies earnings in S&P 500 Index are aggregated together not weighted
Comparing Apple’s earnings in a quarter to Starbucks and why the big 7 matter most right now
Semiconductors weighting in the S&P 500 Index hits a high
Semiconductors as the picks and shovels, bluejeans play for AI?
Mentioned in this Episode:
What Option Volatility Means for Markets | Is the Market Too Dovish on Interest Rate Expectations? | Does the Fed Need an Economics Lesson?
Hedging With Options Examples | Soft Landing? | US Congress Trading Returns | Is Good News or Bad News Good?
Jay Pestrichelli’s book Buy and Hedge https://amzn.to/3jQYgMt
Derek’s new book on public speaking Effortless Public Speaking https://amzn.to/3hL1Mag
Derek Moore’s book Broken Pie Chart https://amzn.to/3S8ADNT
Contact Derek [email protected]
GameStop Option Bets | S&P Too Top Heavy? | Nvidia Passes Apple | Upcoming Banking Problems from Mortgages?
Broken Pie Chart
06/09/24 • 45 min
Derek Moore and Jay Pestrichelli, CEO of ZEGA Financial look at some what seem like crazy options trades in GameStop. Plus, examining Nvidia passing Apple as the second largest stock in the S&P 500, and can it pass Microsoft for #1? They also talk about whether it’s a problem the top 4 stocks in the S&P 500 make up such a large percentage of the weighting and comparing it to the last time it was this high. Later they take some listener questions including whether the data shows cracks in the regional banks due to mortgage delinquencies, what happened in the unemployment report, and more.
Unemployment reaches 4%
Top 4 companies in the S&P 500 Index highest since the 1960’s
Comparing the contribution to returns S&P 500 Index top 496 vs the top 3 and Nvidia
Residential mortgage delinquencies and effect on regional banks
FDIC quarterly data on the health of banks
Nvidia passes Apple for #2 as its market cap exceeds Apples but will Microsoft be next?
1964 vs 2024 top 4 company weighting in the S&P 500 Index
Now the top 4 companies today are a lot more diverse business
GameStop options trading
Looking at the 128 calls open interest, volume and probabilities next 2 weekly expirations
Volatility in the GameStop option chain
Mentioned in this Episode
Mortgage Bankers Association data on residential mortgage delinquencies https://usreop.com/mba-chart-of-the-week-seriously-delinquent-rates-by-loan-type-conventional-fha-va-may-17-2024/
Delinquency rates on commercial real estate loans from FRED https://fred.stlouisfed.org/series/DRCRELEXFACBS
CNBC piece on potential cracks in the banking system https://www.cnbc.com/2024/03/19/where-cracks-in-the-banking-sector-may-appear-without-more-ma.html
Crazy VIX Bets Due to Election? | Market Reversal | Home Ownership Affordability Today | Shiller PE
Derek Moore’s book Broken Pie Chart https://amzn.to/3S8ADNT
Jay Pestrichelli’s book Buy and Hedge https://amzn.to/3jQYgMt
Derek’s new book on public speaking Effortless Public Speaking https://amzn.to/3hL1Mag
Contact Derek [email protected]
Derek Moore and Jay Pestrichelli are back at it discussing how higher interest rates have impacted the price of call and put options. They use some examples of what happens to options prices due to rates and dividends. Then they discuss the recent rise in long term treasury rates, the downgrade of US Treasury debt, and what if any effect the US Treasury issuing massive amounts of new treasury bonds into the market may have. Exploring the 36-month drawdown in the US Aggregate Bond Index compared to other periods. Finally, they check in on how the 3rd year of a presidential cycle is going and then move on to some recommendations.
What effect do higher rates have on option premiums?
How are dividends factored into the prices of options?
Delving into examples of the value of cost of carry interest rates into call prices
The longer end of the treasury curve includes 10 years to 20 years out.
More supply of US Treasury bonds issued by the treasury causing higher rates due to increased supply.
Best and worst market months historically during the 3rd year of the US Presidential cycle
Size of net interest payments expected over the next year.
US State and Local income tax receipts falling?
How net interest debt payments are now larger than Social Security, Defense, and Medicare/Medicaid
Does the US Debt downgrade matter?
How sovereign debt is a relative game as many countries have growing debt to GDP.
The US Aggregate Bond Index is still in 36 months and counting drawdown due to rising rates.
Will the US treasury curve un-invert?
Debating whether a curve reflating involves lower short rates or long rates rising?
Bill Gross bearish on 10-year bonds believing curve may dis-invert by 10 year rising
Mentioned in this Episode:
Cheapest (SPX) PUT Protection You've Ever Seen? | S&P 500 Index Rebalancing | Bank of Japan Hawkishnesshttps://podcasts.apple.com/us/podcast/cheapest-spx-put-protection-youve-ever-seen-s-p-500/id1432836154?i=1000623047871
Does Inflation Matter? | Make More by Losing Less? | Volatility and Cost of Hedging | Someone Buys a lot of VIX Calls
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]
Now Everyone Is Bullish? | Shocking Impact of Missing Just the 2 Best Days Each Year
Broken Pie Chart
02/12/23 • 44 min
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]
2025 Predictions | Un-Inverted Curve | China Deflation Tariff Solution?| Bitcoin Quantum Problem?
Broken Pie Chart
12/30/24 • 61 min
Derek Moore and Jay Pestrichelli round out the year with some 2025 predictions on markets, rates, bonds, oil, bitcoin, the dollar, GDP, inflation, and gold. Plus, does Bitcoin have a Quantum Computing problem? What’s going on with deflation in China and is it the answer to potential tariffs? And news flash, the inverted yield curve is no more as the 10-year treasury yield rises above the 3-month treasury yield. All this and more!
2025 Predictions
China Deflation including 10-year Chinese Government Bond yields falling
China currency valuation, bond yields, and deflation a recipe to nullify US tariffs?
Quantum computer by Google and can it mine Bitcoin?
Will Quantum computers put Bitcoin wallets at risk? (part of our random predictions)
The reversion or un-inversion of the 10 year and the 3-month treasury
The inverted yield curve was the longest ever and didn’t cause a recession
Will the un-inverted yield curve now cause a recession?
VIX Index vs VIX futures spread
Additions and subtractions to the S&P 500 Index
Commodities including coffee, rubber, and cocoa rise
Earnings season soon upon us
Mentioned in this Episode
Derek Moore’s book Broken Pie Chart https://amzn.to/3S8ADNT
Jay Pestrichelli’s book Buy and Hedge https://amzn.to/3jQYgMt
Derek’s book on public speaking Effortless Public Speaking https://amzn.to/3hL1Mag
Contact Derek [email protected]
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FAQ
How many episodes does Broken Pie Chart have?
Broken Pie Chart currently has 314 episodes available.
What topics does Broken Pie Chart cover?
The podcast is about Investing, Podcasts and Business.
What is the most popular episode on Broken Pie Chart?
The episode title 'Cheap vs Expensive Options | Warren Buffett on Options | Fed Powell Presser' is the most popular.
What is the average episode length on Broken Pie Chart?
The average episode length on Broken Pie Chart is 38 minutes.
How often are episodes of Broken Pie Chart released?
Episodes of Broken Pie Chart are typically released every 7 days.
When was the first episode of Broken Pie Chart?
The first episode of Broken Pie Chart was released on Aug 7, 2018.
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