Jay Pestrichelli, CEO of ZEGA Financial, joins Derek Moore again to discuss markets going higher even when earnings decline post bear markets. Plus, they discuss Michael Kantro's HOPE graph showing the order of slowing in the economy through the lens of Housing, New Orders, Profits, and Employment. Then they move on to the drivers of returns talking through PE multiples, margins, revenues, buybacks, and dividends. Speaking of dividends, are they going to be the next big thing if investors believe markets may trade flat for a while? Finally, Jay and Derek give some recommendations that may or may not be good.

Percentage of total stock returns dividends historically make up

Examining prior 1 year forward stock returns after bear market low is in vs. earnings declines

HOPE or Housing, Orders, Profits, Employment, and typical cycles from slowdown to expansion

How dividends plus premium (covered call) selling may augment returns in flat markets

Where market returns come from

How changing margins, PE multiples, share buybacks, and revenues determine returns

Examining where returns came from in other decades and where we stand now

Will dividends be the next hot investment area funds flow to?

Number of new highs in markets by year

Number of greater than >1% down days in the S&P 500 Index

How much the Fed Funds futures implied interest rate has changed by a wide amount

Being hedged vs a dividend strategy

Mentioned in this Episode:

US Debt Bomb and Growing Interest Rates effects on US Federal Deficit and Budget https://podcasts.apple.com/us/podcast/us-debt-bomb-interest-rates-brewing-auto-loan-problem/id1432836154?i=1000602839094

Underperformance of International Stocks https://podcasts.apple.com/us/podcast/underperformance-of-international-stocks-valuations/id1432836154?i=1000601650028

Jay Pestrichelli's book Buy and Hedge https://amzn.to/3jQYgMt

Derek's new book on public speaking Effortless Public Speaking https://amzn.to/3hL1Mag

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 [email protected]