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Episodes

Myths Around Options Plus Hedging Concentrated Positions

5/26/2019
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Jay Pestrichelli is back to join Derek Moore in a discussion around options. Particularly myths around options investing. Why we don’t do individual stock analysis and picking. How someone with low-cost basis in a concentrated stock position can hedge. And are coconut’s more dangerous than sharks? Mentioned in this Episode: Jay Pestrichelli talks options with Yahoo Finance ...

Duration:00:37:10

What the Options Market Tells Us About Expected Stock Moves Around Earnings

5/12/2019
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Often investors notice that after an earnings announcement a stock has the potential to move depending on the news. But what type of volatility or movement was expected before the announcement? Using implied volatility, we can look at how option premiums are pricing in potential expected moves. Derek Moore explains how the numbers work and how you can see what a one standard deviation expected move is once you know where to find implied volatilities of the underlying stock or...

Duration:00:22:51

Get the Facts To Win Your Debate Around US Deficits, Budgets, and Spending Including Universal Basic Income (UBI)

5/5/2019
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Lately 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...

Duration:00:24:19

Part 2: Discussing Myths Around the Classic 60/40 Portfolio

4/22/2019
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Derek Moore and Jay Pestrichelli are back with part 2 of their discussion around the myths prevalent in the 60/40 portfolio. This week they highlight how bonds with low yields may have even more potential interest rate risk than investors think. Plus, they elaborate on why some diversification strategies fail touching on increased risk of the All-Weather Portfolios and Risk Parity Strategies. Finally, they expand on the “Hedgers Opportunity” where a good hedged equity strategy may allow...

Duration:00:28:20

The Unicorn IPOs are Coming: What Their S-1 Filings Divulge

4/14/2019
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You’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...

Duration:00:25:24

Discussing Myths Around the Classic 60/40 Portfolio: Part I

4/7/2019
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For 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...

Duration:00:26:46

The Yield Curve Inverted Plus Explaining Different Ways To Calculate Annualized Returns

3/31/2019
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The 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...

Duration:00:20:15

How Purchasing Power of the Dollar is Eroding Plus Why Inflation Hurts Investors

3/24/2019
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You’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. Mentioned in this Episode: Federal Reserve Bank of Minneapolis estimated inflation from 1800 to 2018 ...

Duration:00:31:30

How to find and review a stocks financials and ratios plus backtesting

3/16/2019
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Have 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: Mentioned in this Episode: See stock earnings financials and ratios www.marketwatch.com Podcast comparing...

Duration:00:31:32

Most Overlooked Benefit from Portfolio Hedging Strategies

2/24/2019
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In 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: Mentioned in this Episode: Jeremy Seigel “Stocks for the Long Run” book https://amzn.to/2GVctSC Robert Shiller “Irrational Exuberance” https://amzn.to/2BNQGJf Broken Pie Chart Book by Derek Moore...

Duration:00:24:03

How Can Investors Hedge Downside Risks on Single Stocks?

2/16/2019
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In 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: Mentioned in this Episode: Broken Pie Chart Book by Derek Moore https://amzn.to/2COXRAS Podcast on How Diversification Can Fail When You Need It Most ...

Duration:00:19:27

Are Hedged Portfolios More Optimal Than Modern Portfolio Theory or Efficient Frontier Designed Ones?

1/27/2019
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In 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: Mentioned in this Episode: Broken Pie Chart Book by Derek Moore...

Duration:00:22:28

Podcast: Probabilities of Future Federal Reserve Interest Rate Moves?

1/5/2019
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In 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: Mentioned in this Episode: CME Fed Funds Watcher Probability Tool ...

Duration:00:26:23

Podcast: Bear Market? This is What You’ve Been Preparing for With a Hedged Equity Strategy

12/20/2018
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In 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,...

Duration:00:33:52

Target Date Investment Funds: Good, Bad, Or Just Misunderstood?

12/16/2018
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Welcome 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: Mentioned in this Episode: Broken Pie Chart Book by Derek Moore https://amzn.to/2MibTSk Report From Committee on Aging Congressional on Target Date...

Duration:00:20:31

What are Risk Adjusted Investment Returns?

12/2/2018
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In 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: Mentioned in this Episode: Broken Pie Chart Book by Derek Moore https://amzn.to/2MibTSk Sortino Ratio...

Duration:00:19:44

EP013: The Option Volatility Episode

11/15/2018
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Welcome 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: Mentioned in this Episode: Broken Pie Chart Book by Derek Moore https://amzn.to/2MibTSk Buy and Hedge Book by Jay Pestrichelli and Wayne Ferbert https://amzn.to/2TaBmO5

Duration:00:51:08

Ep012: Does Diversification Alone Reduce Systematic Market Risk?

11/11/2018
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Welcome 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: Mentioned in this Episode: Broken Pie Chart Book by Derek Moore https://amzn.to/2MibTSk Mark Cuban says “Diversification is for idiots”...

Duration:00:27:00

EP011: How Do Interest Rates Affect the Economy and Stock Market?

11/1/2018
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Welcome 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: Mentioned in this Episode: Broken Pie Chart Book by Derek Moore https://amzn.to/2MibTSk Buffett Indicator...

Duration:00:21:27

Ep10: Deconstructing GDP, Inflation, and Unemployment Economic Indicators for Investors

10/27/2018
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Welcome 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: Mentioned in this Episode: Broken Pie Chart Book by Derek Moore https://amzn.to/2MibTSk Real GDP Growth...

Duration:00:23:40