Broken Pie Chart

Spencer 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 world

Mentioned in this Episode:

Derek Moore's book Broken Pie Chart https://amzn.to/3iKpRcx

Podcast reviewing historical market performance by President and Parties https://directory.libsyn.com/episode/index/show/brokenpiechart/id/15806990

Volatility around elections and the 2000 Bush v Gore market environment https://directory.libsyn.com/episode/index/show/brokenpiechart/id/16298195

Contact Derek www.razorwealth.com

Given 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 and total debt
• • How much debt does the Federal Reserve have on its balance sheet?
• • How much debt does the social security trust fund own?
• • What is the average interest rate on US treasuries on our national debt?
• • CBO Congressional Budget Office projections of growth of the US national debt
• • What is debt to GDP?
• • Revenues and Expenditures of the United States Government budget
• • US debt to revenues collected

Mentioned in this Episode:

Broken Pie Chart Book by Derek Moore https://amzn.to/2MibTSk

Interest on national debt annualized https://fred.stlouisfed.org/series/A091RC1Q027SBEA

CBO Congressional Budget Office long term budget outlook https://www.cbo.gov/publication/56516#:~:text=0%205%20Projected-,Debt.,percent%20of%20GDP%20by%202050.

Debt held by public as percentage of GDP https://fred.stlouisfed.org/series/FYGFGDQ188S

Federal Reserve US Treasuries on balance sheet size https://fred.stlouisfed.org/series/TREAST

US Government revenues receipts https://fred.stlouisfed.org/series/FGRECPT

Whether 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 home prices United States

Mentioned in this Episode:

Derek Moore's book Broken Pie Chart https://amzn.to/3iKpRcx

Historical Median Home Prices US https://fred.stlouisfed.org/series/MSPUS

Pay of mortgage or invest? https://brokenpiechart.libsyn.com/should-i-payoff-my-mortgage-early-or-invest

Contact Derek www.razorwealth.com

Rates 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 future with low interest rates

Correlations between US Treasury Bonds and US Stocks

Historical interest rates 1694-2016 from Bank of England

How negative could interest rates go?

Coupon % on bonds as predictor of future annualized returns

Mentioned in this Episode:

Derek Moore's book Broken Pie Chart https://amzn.to/3iKpRcx

JP Morgan Guide to the Markets: https://am.jpmorgan.com/us/en/asset-management/gim/protected/adv/insights/guide-to-the-markets

CFA institute article on bond coupon rates as predictor for future returns https://blogs.cfainstitute.org/investor/2020/06/25/redefining-fixed-income/

Contact Derek www.razorwealth.com

Your 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 November futures pricing in?

2000 contested election and volatility

How to look up monthly VIX futures contracts

Mentioned in this Episode:

Derek Moore's book Broken Pie Chart https://amzn.to/3iKpRcx

Podcast reviewing historical stock market returns by presidents and parties https://brokenpiechart.libsyn.com/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

Contact Derek www.razorwealth.com

As 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 in October

Historical stock market returns by month

Stock market volatility by month

Implied Volatility vs. Historical Volatility

Importance of just being hedged

Mentioned in this Episode:

Derek Moore's book Broken Pie Chart https://amzn.to/3iKpRcx

MarketWatch article stock market volatility by month https://www.marketwatch.com/story/heres-how-stocks-typically-perform-in-october-and-why-you-might-want-to-buckle-up-2020-09-25

Why investors need a hedging strategy to protect portfolio downside https://brokenpiechart.libsyn.com/why-investors-need-a-protective-hedged-equity-strategy

Podcast reviewing historical stock market returns by presidents and parties https://brokenpiechart.libsyn.com/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

Podcast Episode Robin Hood Option Traders and option pricing and market maker delta hedging https://brokenpiechart.libsyn.com/robinhood-option-traders-vs-the-softbank-whale

Contact Derek www.razorwealth.com

Jay 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 buying cheap deep out of the money call options

Does call buying really force market makers to buy up a lot of shares?

Examining option delta and time decay on short term Tesla call options

How the market sometimes makes you pay a tuition as you acquire trading knowledge

One of the best trading books Market Wizards by Jack Schwager

Examining the reported Softbank option spread positions

Why covered calls sometimes are detrimental to a portfolio

How often the overall market is up more than 15% in a year historically

What does option delta mean?

How does an options delta factor into how a market maker hedges?

Mentioned in this Episode:

Derek Moore's book Broken Pie Chart https://amzn.to/3iKpRcx

Jay Pestrichelli's book Buy and Hedge https://amzn.to/2ZQcYGg

Derek Moore and Jay Pestrichelli White Paper on Concentrated Stock Hedging download here https://zegafinancial.com/products/concentrated-stock

Market Wizards by Jack Schwager https://amzn.to/2FUwGcI

Stock Market Wizards by Jack Schwager https://amzn.to/3cbnhK5

(New Book) Unknown Market Wizards by Jack Schwager https://amzn.to/3kuMuSB

Contact Derek www.razorwealth.com

Lately 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 cost of capital

How low rates may make it easier to achieve ROIC greater than WACC

Historical risk free rates in US Treasury Bonds and Bills

Mentioned in this Episode:

US Treasury Bonds Historical Yield Curve Site https://www.treasury.gov/resource-center/data-chart-center/interest-rates/pages/TextView.aspx?data=yield

Warren Buffett Indicator explained podcast and article https://razorwealth.com/the-buffett-indicator-explained/

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 www.razorwealth.com

Many 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 liabilities

Is a house an asset or liability?

Your car may not be an asset

How to eBay stuff lying around to contribute or start an investment account

Building your personal balance sheet

What your monthly savings could be worth in 5 years

Why budgets do not have to be complicated

Now is a good time to see what memberships you no longer need

Mentioned in this Episode:

Derek Moore's book Broken Pie Chart https://amzn.to/31CDzYP

Contact Derek www.razorwealth.com

The 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 and Party in Power President, Senate, and House

Historical GDP growth rate by Presidents

How often does the President, House, and Senate combinations of Republican or Democrat happen

Reviewing the Electoral College Map prospects for 2020

What is the "13 Keys to the White House" saying about the 2020 election

Predictions for 2020 election

Does the President's party matter for stock market returns?

Surprises within the historical data on returns and GDP growth

Link to 97 years of historical returns by president

Mentioned in this Episode:

Historical Stock Market and GDP Growth by President, Senate, and House Party https://razorwealth.com/do-presidents-and-the-congress-really-impact-stock-market-returns/

270 to Win Electoral Map https://www.270towin.com/

Book 13 Keys to the White House by Alan Lichtman https://amzn.to/2G77GPH

13 Keys to the White House 2020 Version https://amzn.to/3b6ST37

Derek Moore's book Broken Pie Chart https://amzn.to/31CDzYP

Contact Derek www.razorwealth.com