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
The Unicorn IPOs are Coming: What Their S-1 Filings Divulge
April 14, 2019 15:28 - 25 minutes - 23.3 MBYou’ve probably heard about the so called “Unicorn” IPOs or Initial Public Offerings on CNBC. With Lyft already public and Uber, Pinterest, Air B&B, and more on the way, everyone will finally get a glimpse of the financials for all these names. Do they make money? How much or if they lose money, how big is the loss? For those looking forward to finally getting a look inside these companies it can be like Christmas morning. We’ll review what information is disclosed and then compare Amazon an...
Discussing Myths Around the Classic 60/40 Portfolio: Part I
April 07, 2019 14:05 - 26 minutes - 24.5 MBFor years you’ve been told that to get better risk adjusted returns you should diversify with some percentage in stocks and some in bonds. Yet when you look at the inflation adjusted annualized returns, is the idea of a 60/40 portfolio to manage downside risk more of a myth? In this interesting conversation Derek Moore and Jay Pestrichelli discuss why bonds may not offer much of a real return given where rates are. Plus, they delve into whether a 60/40 portfolio offers better risk adjusted r...
The Yield Curve Inverted Plus Explaining Different Ways To Calculate Annualized Returns
March 31, 2019 15:15 - 20 minutes - 27.8 MBThe yield curve has inverted. Well it did at certain points last December already. Now that the 3-month Treasury Bill yield went above 10-year yields, historically what does that mean? Has the yield curve inversion predicted every recession and if so how long in advance? Plus, calculated annualized returns doesn’t need to be that complicated right? Learn the differences in annualizing using simple averages versus geometric compounded averages. Finally, how do you calculate a real inflation a...
How Purchasing Power of the Dollar is Eroding Plus Why Inflation Hurts Investors
March 24, 2019 23:59 - 31 minutes - 28.9 MBYou’ll often hear things like “The US Dollar is losing purchasing power”. But what exactly does it mean when the dollar loses value? In this episode Derek Moore will explain how to calculate dollar purchasing power over time and how to adjust for inflation the costs of good and services. Plus, why inflation is so hurtful to investors. • How does inflation affect retirement investors? • How do you inflation adjust something? • Why a dollar in 1800 is only worth a little less than 7 c...
How to find and review a stocks financials and ratios plus backtesting
March 16, 2019 20:34 - 31 minutes - 28.9 MBHave you ever watched CNBC or Bloomberg and wondered what commentators are talking about with earnings and valuations on individual stocks? Derek Moore explains common financial metrics and ratios to help listeners become informed and how to interpret things like PE Ratios, Earnings, EBITDA, and more. Plus, hear what back testing is and pros and cons of it. Key Takeaways: • What is the difference between top line and bottom line in an earnings report? • How to calculate what a company’...
Most Overlooked Benefit from Portfolio Hedging Strategies
February 24, 2019 20:20 - 24 minutes - 22 MBIn this episode Derek Moore explains the one benefit most investors overlook as a very important benefit of using a hedged equity strategy. The benefit of reinvesting avoided losses or hedging profits to pick up more shares while markets are lower. Key Takeaways: • If you lose this much, how much is needed to get back to breakeven level? • Benefits of using a hedged equity strategy • How hedged equity can take out some guesswork on timing the market. • Explaining how monetizing hed...
How Can Investors Hedge Downside Risks on Single Stocks?
February 16, 2019 18:30 - 19 minutes - 17.8 MBIn this episode Derek Moore discusses situations where investors might own a concentrated position in one stock or more with low cost basis. These present difficulties as selling would incur tax consequences however owning non-diversified positions pose significant single stock downside risk. Key Takeaways: • What is a concentrated stock position? • What are the risks of single stock holdings versus diversified portfolios? • Tax consequences of trying to diversify low cost basis posi...
Are Hedged Portfolios More Optimal Than Modern Portfolio Theory or Efficient Frontier Designed Ones?
January 27, 2019 19:20 - 22 minutes - 20.7 MBIn this episode Derek Moore discusses what Modern Portfolio Theory (MPT) and Efficient Frontier Investing means and how traditional investment risk rely heavily on standard deviation and variance to determine where a portfolio fits into a risk metric. Plus, Derek comments on how positive upside returns can actually increase traditionally used investment ratios like Sharpe. Key Takeaways: • What is Modern Portfolio Theory • What is an Efficient Frontier Portfolio? • How is investment ...
Podcast: Probabilities of Future Federal Reserve Interest Rate Moves?
January 05, 2019 15:38 - 26 minutes - 24.3 MBIn this episode Derek Moore discusses the various ways the Federal Reserve through its FOMC committee utilizes interest rates, buying or selling bonds, and the banks reserve ratios to increase or decrease the money supply. Plus, when pundits on CNBC, Blooomberg, or Fox Business talk about probabilities of future rate decisions, how do they come up with those and where to find them. Key Takeaways: • What are Fed Funds Futures? • How are Fed Funds Futures utilized to determine probabilit...
Podcast: Bear Market? This is What You’ve Been Preparing for With a Hedged Equity Strategy
December 21, 2018 00:54 - 33 minutes - 31.1 MBIn this episode Derek Moore is joined by Jay Pestrichelli, Founder of ZEGA Financial and author of Buy and Hedge: The 5 Iron Rules For Investing Over the Long Term, to discuss how if a bear market materializes clients using a hedged equity strategy have already planed for it and have defined downside floors in portfolios. While not predicting themselves what markets will do, Jay and Derek discuss the features and benefits of limiting downside, participating in the majority of the upside, whi...
Target Date Investment Funds: Good, Bad, Or Just Misunderstood?
December 16, 2018 22:10 - 20 minutes - 18.9 MBWelcome to the Broken Pie Chart Podcast Episode 15. In this episode Derek Moore discusses the often-misunderstood target date funds prevalent in many workers 401k accounts and whether they are a good or bad idea especially given their drawdowns during the 2008 financial crisis. Key Takeaways: • What are target date funds? • How did target date funds do during the 2008 market? • What was performance so different between some target date funds during financial crisis? • What is the p...
What are Risk Adjusted Investment Returns?
December 02, 2018 19:09 - 19 minutes - 18.2 MBIn this episode Derek Moore discusses the concept of Risk-Adjusted Returns, Standard Deviation of Returns, Sortino Ratio, Risk Free Interest Rates. Plus, how to compare two investment returns against one another on a risk adjusted basis and why many investors might be using the wrong investor benchmarks against their portfolios. Key Takeaways: • What are risk adjusted investment returns? • What is the standard deviation of investment returns? • What is the Risk-Free Interest or Disco...
EP013: The Option Volatility Episode
November 16, 2018 03:49 - 51 minutes - 46.9 MBWelcome to the Broken Pie Chart Podcast Episode 13. In this episode Derek Moore is joined by ZEGA Financial Founder Jay Pestrichelli to discuss volatility as an asset class, implied volatility, the VIX Index and more. Key Takeaways: • What is the VIX Index? • Volatility Indexes for the Nasdaq 100 VXN and the Russell 2000 Index RVX • How is the VIX Volatility Index constructed? • What is implied volatility vs historical volatility? • How implied volatility looks to predict perceiv...
Ep012: Does Diversification Alone Reduce Systematic Market Risk?
November 11, 2018 12:52 - 27 minutes - 24.9 MBWelcome to the Broken Pie Chart Podcast Episode 12. In this episode Derek Moore discusses why diversification alone may not reduce systematic material stock market risk using the backdrop of the 2008 Financial Crisis. Plus, potential solutions using real hedging in portfolios. Key Takeaways: • What are the two main types of stock market investment risk? • What is single stock or concentrated stock risk? • What is systematic market risk? • What is diversifiable stock risk? • Why ...
EP011: How Do Interest Rates Affect the Economy and Stock Market?
November 01, 2018 23:54 - 21 minutes - 19.8 MBWelcome to the Broken Pie Chart Podcast Episode 11. In this episode Derek Moore discusses how changes in interest rates affect not only obvious things like car loans and home loans but also potential stock market and stock valuations. How does a higher discount or interest rate change the present value of earnings? Key Takeaways: • How Do Higher Interest Rates Potentially Affect Stock Valuations? • What is the Discount Rate? • How Do Interest Rates Affect the Value of Future Earnings...
Ep10: Deconstructing GDP, Inflation, and Unemployment Economic Indicators for Investors
October 27, 2018 04:08 - 23 minutes - 21.8 MBWelcome to the Broken Pie Chart Podcast Episode 10. In this episode Derek Moore discusses some economic indicators that matter to investors. Many people hear the terms GDP, Inflation, Unemployment, and the Fed Funds Rate but aren’t exactly sure what they really mean. We look to deconstruct these popular indicators and show how they are important to investors. Key Takeaways: • What is Inflation and the Consumer Price Index or CPI? • What is GDP (Gross Domestic Product)? • What is the ...
Two Main Things People Get Wrong Comparing 1970’s Bonds in Rising Rate Environment to Potential Rise in Rates Today Show Summary:
October 13, 2018 14:18 - 30 minutes - 27.8 MBWelcome to the Broken Pie Chart Podcast Episode 9. In this episode Derek Moore discusses the relationship between bonds and interest rates. Plus, what everyone gets wrong when pointing to bond returns during the late seventies when interest rates were rising and how returns weren’t that bad. While we can’t predict where interest rates will go, we certainly can learn a lot about what drives bond market values regarding interest rates and how a spike in rates now would be different from the ni...
The Warren Buffett Indicator
September 29, 2018 01:13 - 20 minutes - 18.5 MBWelcome to the Broken Pie Chart Podcast Episode 8. In this episode Derek Moore reviews the so-called Buffett Indicator as well as the Shiller PE Ratio. With markets once again at all-time highs we are seeing some various articles and commentary on how to tell what market valuations might be considered too high or low. Key Takeaways: • What is the Warren Buffett Indicator? • How is the Buffett Indicator calculated? • Where to find the Nominal GDP and market cap to use to calculate th...
Using Big Data and Machine Learning to Pinpoint Stocks Earnings Surprises
September 20, 2018 13:27 - 36 minutes - 33.1 MBWelcome to the Broken Pie Chart Podcast Episode 7. In this episode Derek Moore is joined by Alpha DNA Founder Wayne Ferbert to discuss how they are using big data, machine learning, digital internet analytics, and proprietary algorithms to detect changes in consumer demand which can lead to pinpointing earnings surprises in a universe of 3000 companies across various market caps. These changes in trends seen by analyzing the digital internet footprint looks to determine whether companies’ qu...
Adding Downside Buffers to Investment Portfolios Using Options
September 13, 2018 20:40 - 38 minutes - 35.4 MBWelcome to the Broken Pie Chart Podcast Episode 6 Adding Downside Buffers to Investment Portfolios Using Options. In this episode Derek Moore is again joined by Jay Pestrichelli, founder of ZEGA Financial and co-author of the book Buy and Hedge to discuss using options to create positions which control but don’t own shares of stock market indexes. These positions have the goal of providing upside greater than the market while installing a downside buffer down to a certain level in case marke...
Do Presidential, Senate, and House Party Affiliations Really Impact Stock Market Returns?
September 01, 2018 00:20 - 35 minutes - 33.1 MBWelcome to the Broken Pie Chart Podcast Episode 5 Do Presidential, Senate, and House Party Affiliations Really Impact Stock Market Returns? In this episode host Derek Moore takes listeners through historical S&P 500 Index Total Returns back to 1923 matched up with the President, whether they were republican or democratic, as well as the party affiliation of the senate and house. Many might be surprised at the results when Derek explains the annual average stock market returns by various comb...
Why Investors Need a Protective Hedged Equity Strategy
August 23, 2018 12:49 - 50 minutes - 46.5 MBWelcome to the Broken Pie Chart Podcast Episode 4 Hedged Equity and Protective Investment Strategies. This week host Derek Moore , author of Broken Pie Chart, is once again joined by Jay Pestrichelli of ZEGA Financial and author of Buy and Hedge. Investors often miss out because of staying un-invested for fear of large market drawdowns or try to pick the absolute market top and sell too early. Derek and Jay have a lively discussion around what exactly strategies that hedge downside risk are ...
Volatility as an Asset Class? Discussion Around Shorting Volatility Premium Using Credit Spreads
August 16, 2018 17:10 - 48 minutes - 44.9 MBWelcome to the Broken Pie Chart Podcast Episode 3 Short Volatility. In this episode Derek Moore and guest Jay Pestrichelli discuss the emergence of short volatility strategies. How selling option premium with short put spreads and short call spreads can potentially generate income. With the low interest rate environment bonds are experiencing, will short volatility strategies start nudging fixed income’s place in many portfolio pie charts? We also discuss how sometimes the VIX Index is mista...
What is the Yield Curve Inversion and Why People Care?
August 09, 2018 13:29 - 23 minutes - 21.9 MBWelcome to the Broken Pie Chart Podcast Episode 2 Yield Curve Explained. In this episode we will explore what the yield curve is, how the difference between short term interest rates and long-term interest rates can change the shape and look of the yield curve. We also touch on why everyone seems to be talking about potential yield curve inversions and what that means for the economy. Discussion builds around giving some historical perspective on past recessions in the US where we saw a yiel...
What to Consider When Saving for Retirement
August 07, 2018 17:28 - 29 minutes - 27.4 MBWelcome to the Broken Pie Chart Podcast. This is episode 1, and I’m your host, Derek Moore. Today we’ll be discussing key factors in saving for retirement and a bit about retirement calculators. The genesis of this discussion came about when I was recently asked, “Do I have enough saved based upon my age? When do you think I can retire?” Where you are as an investor is a function of several inputs. So I thought it would be helpful today if I went through some of the inputs that go int...