Intrayear Selloffs – Misleading PE on Russell 2000?

Broken Pie Chart

English - January 31, 2022 12:59 - 23 minutes - 21.7 MB - ★★★★★ - 16 ratings
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Previous Episode: Most Anticipated Fed Meeting While Markets Selloff

Next Episode: Stock Multiple Rerating – The Yield Curve Message

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