Broken Pie Chart
275 episodes - English - Latest episode: 29 days ago - ★★★★★ - 16 ratingsThe Broken Pie Chart Podcast offers fresh looks at investment portfolio management, economics, markets, retirement planning, and more by simplifying and explaining important aspects of financial markets and the economy in easy to understand ways.
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Episodes
You’re Worrying About the Wrong Things Plus S&P 500 Index Earnings and Valuation
July 27, 2021 00:06 - 31 minutes - 42.7 MBThis week we discuss how advances in technology and dropping costs have made it better for investors. Has it ever been this good? Maybe investors worrying about payment for order flow are worried about the wrong things? Looking back when there was no dividend reinvestment and high commissions, it would have cost you an arm and a leg to replicate the index. Then we discuss updates to the S&P 500 earnings estimates and forward PE valuations. How things have changed from March of 2020. Ho...
Watch the Data not the News on Inflation
July 18, 2021 15:13 - 38 minutes - 52.2 MBLast week the latest CPI inflation data came out from the BLS. If you watched the news, they played it up. While we don’t know what inflation will be with any certainty, stop watching the news and start watching the data for yourself. In this week's episode, Derek runs through factors to keep an eye on and where you can track the data for yourself. What's going in with rental car prices? What about energy prices? What happens if you remove the re-opening items from core CPI? CPI ...
Container Shipping Effect on Inflation and Markets
July 13, 2021 14:58 - 36 minutes - 49.6 MBContainer shipping rates are at all-time highs. So How bad is the situation? How bad is the backup at various container shipping ports? What effect is this having on inflation in the short term? Evergiven container ship released from Suez Canal Busiest Container Shipping Ports Problems at Yantian port Ships anchored of container shipping ports causing backups The surge in Container shipping prices Panana Spread all-time high container shipping rates Empty sailings contain...
Dan McMullen Talks Senior Loans, Leveraged Loans, CLOs, And More
July 03, 2021 18:56 - 50 minutes - 68.9 MBDan McMullen Senior Managing Director and Senior Portfolio Manager in Blackstone’s Credit Liquid Credit Strategies Unit, SPDR Blackstone Senior Loan ETF (Symbol: SRLN) joins the podcast to explain what senior loans are. How senior loans compare to leveraged loans and CLOs or collateralized loan obligations. Plus, Dan explains what the risks are, how they compare to high yield bonds, and what happens in the event of bankruptcy. Later Dan gets into how loans trade and are priced plus whether t...
How Does Volatility Change Options Prices
June 27, 2021 15:38 - 30 minutes - 42.1 MBOften, we get questions on why one company’s options are priced so differently than another. So how options prices differ based on implied volatility? What makes up intrinsic value vs extrinsic value in options premium? Compare a high volatility company to a lower volatility company in the options market. How to calculate expected single standard deviation expected move based on IV Implied Volatility Implied Volatility Volatility Intrinsic Value Extrinsic Value Time value i...
Is Inflation Really Out of Control?
June 20, 2021 15:07 - 24 minutes - 33.5 MBThe Federal Reserve this week held their June meeting and released their new dot plot. Chairman Powell also did his customary press conference. The Fed says inflation is transitory and likely temporary. Others disagree. They even said they are talking about talking about tapering. So is inflation out of control or transitory as the Fed claims. Plus, what did they do or did not do on policy changes? Sticky CPI vs Flexible CPI The Fed’s new dot plot Fed track record on projection...
Buy and Hedge: Protect Yourself from Yourself – Miss Two Best Market Days?
June 13, 2021 19:07 - 52 minutes - 72.2 MBZEGA CEO Jay Pestrichelli and Derek are back together to discuss some surprising data that shows missing just the two best stock market days of the year can dramatically change returns. How Buy and Hedge Hedged Equity Strategy can be a hedge on missing out on markets when your fearful or bearish. Plus, life hacks from a 10-year-old and a famous Peter Lynch quote Peter Lynch quote What is Buy and Hedge Strategy? What is Buy and Hedge Retirement Strategy? Hedged Equity to avoid...
Fed Tapering?
June 06, 2021 18:42 - 26 minutes - 36 MBThe Fed announced it plans to sell the ETFs and bonds it purchased. They are already doing reverse repo operations. Some have asked when they will reduce their monthly asset purchases. So, what is the Fed doing, and what are some potential things they might do? Fed Taper? Fed Reverse Repo Overnight Market Fed Funds Rate Interest Rates Asset Purchase Program Operation Switch MBS Mortgage-Backed Securities IOER Interest on Excess Reserves Probability of Fed rate hike? ...
What are Reverse Repos and Repos? Fed Enters Overnight Reverse Repo Market
May 31, 2021 14:01 - 25 minutes - 34.6 MBThe Federal Reserve this week set a record participating in the Overnight Reverse Repo Market. Previously in 2019 they had to enter the Overnight Repo Market as annualized rates soared. So, what are Reverse Repos? What are Repos? Why is the Fed trying to control interest rates by doing market operations in the Reverse Repo Market? What is the Reverse Repos? What are Repos? What is the Overnight Repo Market and Overnight Reverse Repo Market ON RRP What is the annualized repo ...
Stages of Stock Market Bubbles
May 23, 2021 13:36 - 29 minutes - 40.9 MBMarket Bubbles are tough to spot the absolute turning point. But most bubbles have the same stages and patterns. So what are some potential tells that we are in a bubble using historical examples? Comparing Dotcom Bubble to the Tulip Bubble. Are Bitcoin or Ethereum in an asset bubble? What is an asset bubble? Stages of an asset bubble The housing bubble Dotcom bubble Tulip Bubble South Seas Bubble Kathy Lee Gifford and the rough rice futures market bubble Irrational e...
How is Inflation Measured? Sticky CPI vs Flexible CPI
May 16, 2021 14:43 - 41 minutes - 56.9 MBBroken Pie Chart | Episode 116 With Derek Moore How is Inflation Measured? Sticky CPI vs Flexible CPI Show Summary: All you hear these days on CNBC is inflation. How high will inflation go? What is causing inflation? But how is the CPI constructed to measure inflation? What are the weightings of CPI components? And, what is the PCE Inflation Index which is preferred by the Fed? • What is the CPI Consumer Price Index? • What is the PCE Personal Consumption Expenditures? • ...
How Much Ethereum and Bitcoin Should I Have in my Portfolio?
May 09, 2021 13:51 - 1 hour - 84.2 MBRecently more and more investors are asking about Ethereum and Bitcoin. How much crypto currency should I have as a percentage of a portfolio? Is Bitcoin and Ethereum a good hedge against rising inflation? Derek and Jay Pestrichelli, CEO of ZEGA Financial, discuss what they are, the differences between them, and what is going on with Dogecoin? What is Ethereum Crypto Currency? What is Bitcoin? What is the difference between Ethereum and Bitcoin? What is Dogecoin? Is Bitcoin an ...
What are SPAC Special Purpose Acquisition Companies?
May 04, 2021 15:00 - 19 minutes - 26.6 MBSPACs or Special Purpose Acquisition Companies 2021 growth has outpaced even 2020’s record year. So, what are SPAC companies? Are SPAC companies good or bad? What are some famous SPAC companies? SPAC Special Purpose Acquisition Companies SPAC timeline from creation to IPO of new company What Happens if the SPAC cannot find an acquisition target? SPAC companies have record 2021 with over $100billion raised. SEC looking at SPAC companies according to WSJ What am I buying wi...
US 10 Year Treasuries Returns by Decade. Duration vs Maturity – More Risk Today Than Ever?
April 28, 2021 20:51 - 27 minutes - 37.6 MBMany investors saw a rise in rates causing negative returns on bonds in Q1 of 2021. Many were surprised. How is risk heightened due to low interest rates? Duration vs Maturity in understanding bond rate risk. Plus, how have US Treasuries performed by decade. 10 Year US Treasury Returns by Decade Duration vs Maturity to Determine Interest Rate Risk Coupon Payments Time to Capture Principle Call Provisions in US Treasuries? Comparing different 30 Year Treasuries Current Marke...
Marcel Benjamin - High Yield Bonds Explained – What are Zombie Companies?
April 19, 2021 12:52 - 55 minutes - 76.9 MBMarcel Benjamin, Fixed Income Strategist with State Street Global Advisors SPDR ETF Fixed Income Group, joins to present a deep dive into the High Yield Fixed Income space. What makes a bond part of high yield? What are the risks with High Yield Bonds? How do the ratings differ across the spectrum? Plus, what makes a company a “Zombie Company”? • US What does it mean to be considered high yield? • Differences in companies who go from BBB to Junk. • CCC vs BB • Size of high yie...
MMT Modern Monetary Theory’s Fatal Flaw? – What is in US Federal Budget? – Is the Tax Rate Irrelevant to Revenue Collected?
April 11, 2021 16:30 - 44 minutes - 60.9 MBSpencer Wright from Halbert Wealth is back on the program to engage in a discussion around what makes up the Federal Budget. How much does all this cost and where do revenues come from? Plus, some thoughts around why MMT or Modern Monetary Theory may never work despite some economists’ best intentions. US Federal Budget Items What does the US government spend money on? What is the net interest payments on the national debt? Where does the revenue come from? Comparing US go...
Stock Market Overvalued? – Stock Market Bubble and Inflation Google Searches Trending – Treasuries Worst Quarter Since?
April 04, 2021 12:05 - 28 minutes - 39.5 MBRecently I looked up Google Trends to see how terms like inflation and stock market bubble were doing? They have been popular which means people are searching for them. Is this contrarian? How to play armchair stock market valuation game by looking at expected earnings. US Treasuries had the worst quarter performance since 1980 and third worst since 1830. GDP growth according to Goldman Sachs will be 8%. Is that inflationary? Goldman Sachs says 2021 GDP growth will be 8% Does thi...
Deal or No Deal – Hedged Equity – Option Value of Cash – Utility of Bonds in Portfolios
March 28, 2021 12:33 - 40 minutes - 55.3 MBRecently John Hussman put out a piece that the expected value of a 60/30/10 stock and bond portfolio over the next 12 years would be -5%. Future projections can be wrong or right, but what he explained that the option value of cash or a hedged equity approach may be more suited. So how does hedged equity play into this? How Deal or No Deal game show explains the expected value calculation. And why bonds with low rates and risk of rising rates might present challenges in the typical 60/40 por...
How Has the Stock Market Done Historically During Rising Rate Periods? Be Hedged!
March 14, 2021 13:08 - 22 minutes - 31.2 MBWatch CNBC for more than 5 minutes and you are bound to hear discussion around is inflation coming? Are rising interest rates going to sink the stock market? But what has the stock market done historically during periods of rising rates? You might be surprised to find out. Take a look back at S&P 500 Returns in rising rate environments, rising inflation, rising unemployment, and more. Once again, worries about the stock market led us to a Hedged Equity Strategy How have stock ma...
U.S. Dollar Index Explained and Strong vs Weak US Dollar Pros and Cons
March 07, 2021 13:23 - 25 minutes - 34.9 MBRecently financial news media mentioned that bearish short bets against the US Dollar were the highest since 2011. But what is the dollar index and is it the best measure? What is the Trade Weighted US Dollar Index? What is the good and bad of a strong vs week US Dollar? US Dollar Index Trade Weighted US Dollar Index Pros and Cons Strong Dollar Pros and Cons Week Dollar Short US Dollar position reaches highest level in a decade. US Dollar and commodities How to figure o...
Interest Rate Shock! Is Inflation Coming?
February 28, 2021 13:15 - 26 minutes - 35.8 MBInterest rates made a historic move higher last week as the treasury bond market sold off. But is this spike in interest rates previewing a higher move in inflation in the short term? What are breakeven inflation rates saying? Is the FED owning 30% of the TIPS bond market skewing inflation expectations? What is duration risk in bond portfolios? How does lower rates extend duration risk in bonds? Investor expectation of annual returns equal to the current yield to maturity? 20...
Bitcoin vs Gold vs Just Be Hedged on You Stock Portfolio?
February 14, 2021 13:51 - 45 minutes - 62.5 MBThis week Jay Pestrichelli and Derek Moore are back to discuss whether Bitcoin or Gold are good hedges. What the appeal of cryptocurrencies are? How just being long the market while have a hedged floor in the portfolio allows investors to be in the historically best inflation adjusted return asset. Appeal of Bitcoin How Inflation is hurting the dollar’s purchasing power Gold as an inflation hedge Golds real return might be less than people think. Aren’t bitcoin transactions all...
Gamestop Short Squeeze Follow Up – Naked Shorts – Short Interest – Secondary Offerings – Short Sellers Good or Bad?
February 07, 2021 13:21 - 30 minutes - 41.5 MBThis week we follow up on or episode last week covering what the Gamestop short squeeze was all about. Are hedge funds naked shorting stocks? How margin accounts cause risk to brokerage firms like Robinhood. Why didn’t Gamestop do a secondary offering selling shares when the price was high? Why short sellers don’t ruin companies outright. Naked Short Selling Failure to Deliver Shares Reports FTD Short Interest Reports Secondary equity stock offerings AMC convertible debt into s...
GameStop Short Squeeze by the Reddit Wall Street Bets Traders Explained
January 31, 2021 16:04 - 43 minutes - 59.5 MBThe Wall Street Bets community executed a short squeeze through Reddit on stocks like GameStop and AMC Theatres this week. But what is a short squeeze? How did they and others buying stocks and options cause the stock to go up at least in the short term? Is short selling bad? Why potentially some brokers had to halt trading in certain names? A look back to the late nineties when internet chat rooms were pushing stocks. Examples of the little investor turning thousands into millions, and vice...
Get the Facts To Win Your Debate Around US Deficits, Budgets, and Spending Including Universal Basic Income (UBI) ( Replay)
January 24, 2021 11:11 - 24 minutes - 22.3 MBLately things like the Universal Basic Income (UBI) and Social Security are debated on TV. Commentators throw around numbers and whether a program can be paid for. Plenty of debate on each side but why not understand for yourself where all these numbers are coming from. In this episode Derek Moore covers what makes up the Federal Budget, Tax Revenue, Interest Payments on Debt, and how much something like a UBI would cost so you can decide. Plus, the effect rising rates and increases in debt ...
What Causes Inflation?
January 21, 2021 13:14 - 26 minutes - 36.8 MBWith this month’s increase in US Treasury interest rates the talk about inflation came up quite a bit in the financial news. But what causes inflation? What are the different types of inflation? How is inflation measured? Different causes of inflation Cost Push Inflation Demand Pull Inflation Hyperinflation Structural Inflation CPI Index Hedonic Adjustments to CPI Substitutions in CPI measurement Velocity of Money Productivity Measurements in Economy Me...
Do Bond Yields Imply The S&P 500 is Undervalued?
January 10, 2021 21:49 - 21 minutes - 29.6 MBRecently there have been many discussions on the valuation of the S&P 500 based on forward earnings multiples. But what role do bond yields have in that evaluation? Does the implied P/E ratio of the Baa bond yield or US 10 Year Treasury yield imply that stocks have more room to run? In any case, why not just buy but hedge as a strategy? S&P 500 Index earnings yield Inverse of P/E ratio is the E/P earnings yield. Baa bond yield to calculate the implied P/E ratio Baa bond yields vs...
High Probability Option Strategies Explained (Replay)
December 27, 2020 13:58 - 37 minutes - 34.1 MBDerek Moore and Jay Pestrichelli team up once again to discuss how probabilities are used to understand where to sell short options to generate premium. Discussed in this episode are who is on the other side of the short volatility trade, how changes in implied volatility impact expected multiple standard deviations of expected movement, and how value at risk VAR impacts option premiums. Plus, they discuss how professional management adds value especially when option spreads widen and volati...
IPO Process: Traditional IPO vs Direct Listing IPO – AirBnB gets huge IPO pop
December 13, 2020 13:29 - 20 minutes - 28 MBLately some high-profile companies have gone public using the IPO process. But how does it work and what are the differences between a traditional IPO listing and a Direct Listing IPO? Is Bill Gurley right when he says companies are leaving too much money on the table? AirBnB IPO price pop IPO Process – Investment banks and selling syndicate Direct Listing IPO Greenshoe IPO provision Bill Gurley advocates for direct listings IPO price vs trading price Spotify and Slack as d...
Sequence of Returns: Lose Early or Lose Late?
December 06, 2020 10:41 - 22 minutes - 30.8 MBSome investors wonder whether it would be better to have bad returns early or bad returns late? Surprisingly unless someone is withdrawing funds or bringing in money it does not matter. But when does it matter? It can be quite a significant different during the withdrawal stage. Learn about how the sequence of returns comes into play depending on what phase you are in. Is it better to have bad investment returns early or late? Three main phases of an investor’s lifecycle Contributi...
Viktor Nebehaj - Freetrade CMO and Co-Founder Talks Making Investing More Accessible to the World
November 29, 2020 13:46 - 49 minutes - 67.6 MBViktor Nebehaj guests on the episode to discuss how app-based brokerage Freetrade is looking to help millennials break down barriers and costs to make investing a habit. How technology has reduced friction in helping them get started. Why they and others like Robinhood have been able to acquire investors even though the legacy brokers offer the same or more. How do companies like his make money when commissions are zero? Freetrade bringing ease of investing to Europe and the world Ho...
Why Investors Should Not Climb the Wall of Worry in the Stock Market
November 15, 2020 18:00 - 55 minutes - 76.4 MBThe Wall of Worry pertains to investors always worrying as markets climb higher. So what are some of the bull and bear cases on the markets, valuations, inflation, interest rates, stocks and bonds? Jay Pestrichelli is back on the program to discuss all these and hedging strategies as alternatives. What is the Wall of Worry for investors? Are Bonds even worth it given such low interest rates? Potentially better portfolio hedges than bonds The bull and bear case for inflation Wh...
Find Money in Your Couch Cushions to Invest in the Stock Market: How to Buy Your First Stocks
November 15, 2020 17:21 - 24 minutes - 33.4 MBClean your garage this weekend to find something to sell on EBAY to fund your investment account. Where to go to open an investment account. How to buy fractional shares of companies. Should I buy a fund or individual stocks when starting out? Schwab vs Robinhood? Schwab and Fidelity stock slices for fractional share purchases How to buy your first stock Dollar cost averaging periodic investment each month Minimums for investments How to find money to put towards investments (c...
2020 Election Predictions and Review
November 01, 2020 17:01 - 1 hour - 106 MBSpencer Wright of Halbert Wealth Management joins the podcast to talk through the various Senate and Presidential races. What are the polls saying? What about the hidden Trump vote? Likely scenarios for the electoral college. Review of key senate races and predictions The electoral college landscape in key states Why Michigan, Pennsylvania, and Arizona may decide the 2020 election Reliability of polls The Trafalgar Polls vs. everyone else Someone is wrong in the polling wo...
Understanding US National Debt: Is it really that bad?
October 27, 2020 22:40 - 27 minutes - 37.1 MBGiven the varies stimulus plans in 2020 the national debt has risen to new records. Yet, this political season we’ve heard little to nothing about it. How to understand the national debt, debt to GDP, debt held by the public. Plus, what does the CBO (Congressional Budget Office) say the debt to rise to? Will the interest payments exceed the cost of social security and all of defense before long? • How to see what the US national debt held by the public is • Compare debt held by the public...
Is Your House an Asset or a Liability?
October 18, 2020 12:04 - 25 minutes - 34.7 MBWhether owning a home or owning stocks creates strong opinions on both sides. But what would be a way to evaluate the differences? Historically how have returns of homes vs the S&P 500 Index compared? What homeowners miss about gains in the price of their home. Historical annualized returns housing vs the stock market Is your house an asset or a liability? How to think about your total true cost of owning a home Your home as a hedge on inflation Rent vs Own Historical median ...
Bonds: Why Past Returns Performance May Not Predict the Future
October 12, 2020 12:35 - 21 minutes - 19.8 MBRates jumped 30% in the US Treasury 5-year maturities this past week! Off course they only went from .25% to .33%, but why are some analysts on CNBC saying the next 10 years bonds may not return the same amount? What are the risks in bonds should interest rates rise? Do bonds offer a negative real return after inflation? End of the Bull Market in Bonds? Bonds sensitivity to interest rate changes 1970s and 1980s inflation effect on bonds total returns The 60/40 portfolio in the fu...
Is the Election Causing Huge Volatility Spike for November VIX Contracts?
October 06, 2020 21:30 - 21 minutes - 19.5 MBYour starting to hear about the options market pricing in huge volatility for November. This week, there was talk about the December contract getting bid up in case of a contested election. What does that mean? And how did volatility react during the Bush vs. Gore Florida recount and supreme court decision in the 2000 Presidential Election? VIX Futures VIX before and after Bush v Gore 2000 election November VIX futures vs October and December How much more volatility is the Novem...
Is October Really the Most Volatile and Worst Month For Stock Market Returns?
September 27, 2020 17:34 - 20 minutes - 18.7 MBAs October is here naturally the stories start to appear around volatility and historical market returns. Many people assume October is the worst month for the stock market. Is October the most volatile? What is the average stock market returns by month? In this episode we will review and answer those questions. Plus, is it more important for the market to expect volatility in the “implied volatility” vs historical volatility? Stock market returns in October Stock market volatility i...
Robinhood Option Traders vs. The Softbank Whale
September 19, 2020 11:02 - 46 minutes - 42.7 MBJay Pestrichelli co-hosts this episode with Derek where they discuss the continued talk around Robinhood Traders buying deep out of the money options to force market makers to buy stock. Plus, they discuss the reported $4 Billion spent buy Softbank to purchase option positions in some tech names. How do market makers hedge and the challenges with short term deep out of the money call option buying? Plus, why they both hate and love the idea of covered calls. Robinhood Option Traders bu...
Do Low Interest Rates Affect Stock Prices?
September 13, 2020 12:13 - 20 minutes - 19.1 MBLately you have probably heard analysts going on CNBC saying given where interest rates are valuations are or are not overstretched. But how do interest rates, and low interest rates, affect stock valuations? How to they affect the cost of capital and the ROIC or return on invested capital? How do you discount down future earnings based on a discount rate? Why interest rates matter to investors The present value of future earnings Interest rates and the WACC or weighted average cos...
Netflix is Not Making You Broke: Personal Finance Budgets and Cash Flow Made Easy
September 07, 2020 13:41 - 26 minutes - 24.3 MBMany people know they should understand what their current net worth is. Many also know they should get a handle on their cash flow versus income. Yet it often seems too complicated. Lets uncomplicate personal finance a bit and see how to come up with your current assets and liabilities quickly and easily. Also, how to compile and work through your expenditures versus income. The larger expenses matter more than your little Netflix monthly expense Liquid vs Illiquid assets and liabi...
Surprising Historical Returns by Presidents, Senate, and House by Party – Reviewing the 13 Keys to the White House for 2020 – Predictions for the 2020 Election President and Senate
August 30, 2020 13:15 - 1 hour - 58.4 MBThe US Presidential election season is in full swing. But does it matter for the Stock Market which party gets elected? Spencer Wright from Halbert Wealth joins Derek to review some surprising historical statistics around market returns and GDP growth. Including some surprising data on some Presidents you might have been better or worse. Plus, they go through Professor Alan Lichtman’s 13 Keys model to try and predict this year’s election. Historical stock market returns by Presidents a...
What is Forward PE Ratio on S&P 500? Earnings Yield and Comparing Earnings Drop 2020 to 2008 Periods
August 23, 2020 21:35 - 23 minutes - 21.8 MBIf you listen to CNBC or Bloomberg you probably hear analysts talking about how the Forward PE Ratio is higher than historical averages on the stock market. But how are they figuring these numbers? How does the drop in earnings in the S&P 500 in 2020 due to Covid19 compare with earnings drops in 2008 and 2009? How long did it take them to recover? What is a Forward PE Ratio? How is the Forward PE Ratio calculated? What is the Earnings Yield? How is Earnings Yield calculated? Dr...
Will the 60/40 Portfolio’s Demise Ever Arrive? Are bonds still worth the risk?
August 16, 2020 12:40 - 27 minutes - 25.3 MBFor years many have pointed to the end of the 60/40 Portfolio’s reign as a mass recommended asset allocation. But even in 2020, it still worked as bonds rallied and interest rates dropped to record low levels in the US. But with rates this low, do the risks now outweigh any potential benefits? How much more could bonds rally due to changes in interest rates given where they are? How negative could rates go? What is 60/40 Stock Bond portfolio? Is it realistic to think bonds will have ...
Does Falling Money Velocity Point to Lower Inflation?
August 09, 2020 13:24 - 25 minutes - 23 MBIn the recent Covid financial crisis the Federal Reserve “printed” a bunch of money that increased the money supply. This should lead to massive inflation, right? Well, maybe not if we look at the relationship between the velocity of money (how often the same dollar is used) and the inflation rate. See how to figure out the velocity of money. What is the money supply and where to find it? What is the Velocity of Money? What is the money supply? Difference between MZM, M1, and M...
Apple 4-1 Stock Split – Do Stock Splits Matter – Dow Jones Index Major Re-Weighting Should Apple Split Stock
August 02, 2020 16:05 - 15 minutes - 14.5 MBApple released earnings last week but also announced their board authorized a 4-1 stock split. Do stocks splits matter anymore? And would a 4-1 Apple stock split completely shake up the weighting of the Dow Jones Industrial Index? Effect of Stock Splits Authorized stock split vs. implemented How a stock split affects a company’s market cap What changes around earnings history and price history post stock split? How are companies in the Dow Jones Index weighted? Price weighted...
Day Trading for a Living? – Tesla Option Traders Get an Earnings Lesson
July 26, 2020 14:29 - 24 minutes - 22.6 MBLast week we talked about Tesla’s potential to qualify for the S&P 500 Index. Post earnings, some new option traders were surprised by the stock and options prices post positive earnings release. Plus, a paper recently updated called “Day trading for a living?” compile data on day traders trading futures contracts. The results were not too promising but what did the paper leave out? Tesla options implied volatility in premiums post earnings release Robinhood traders on Reddit messag...
Will Tesla Get Into the S&P 500 Index? What are criteria for stocks to make S&P 500 Index?
July 19, 2020 13:38 - 20 minutes - 18.5 MBTesla has had a meteoric rise lately. At their recent high their market cap would have put them in the top 10 weighted companies of the S&P 500 Index. But will Tesla have the required consecutive quarters of positive earnings? What are the criteria for a company to be included in the S&P 500 Index? When does S&P do their index rebalancing? Which companies have been added and deleted from the index? Tesla current market cap What would Tesla’s weighting be if they made the S&P 500 Ind...
Disconnect Between the Stock Market and the Economy?
July 12, 2020 11:43 - 24 minutes - 22.6 MBWhy doesn’t the stock market and economy both go up or down with one another at the same time? How is the market a forward-looking discounting mechanism? How do recessions and earnings expectations play into underlying price of the S&P 500 Index? Atlanta Fed GDP Now Comparing historical recessions by examining real GDP declines Great Depression vs. Financial Crisis vs 2020 Covid19 Recession Looking at consensus S&P 500 Index earnings forecasts 2020, 2021, and 2022 How the mark...