Markets Getting Overvalued? | MicroStrategy Convertible Bonds| 1st Year Presidential Cycle | 2025 Year End S&P 500 Targets Lazy?| MicroStrategy Option Volatility

Markets Getting Overvalued? | MicroStrategy Convertible Bonds| 1st Year Presidential Cycle | 2025 Year End S&P 500 Targets Lazy?| MicroStrategy Option Volatility

Author: Derek Moore December 2, 2024 Duration: 1:04:41

Derek Moore and Jay Pestrichelli join up once again to talk about whether the forward PE ratio is getting overextended. Then, they discuss where we are in the 4-year Presidential market cycle, years with the most all-time highs, the US Dollar and interest rates, and PCE inflation numbers. Later, they get into the dynamics of the MicroStrategy convertible bonds and how they resemble options.  Finally, they talk through the option dynamics on MicroStrategy include what the implied volatility is, what it is implying for a move over the next year, and what the breakeven levels would be on a 1-year option. Hint, it may be crazy!

 

MicroStrategy convertible bonds explained

MicroStrategy option implied volatility

Price of the 1-year MicroStrategy straddle and breakeven levels

2025 Wall Street S&P 500 Index year end targets

Looking at how many times the markets are average

Inflation is still above the 2% Fed supposed target so what now?

US Dollar index and interest rates

Which year had the most intra-year all-time highs?

1st year of the presidential cycle and the market

Forward PE ratios are extended so is that an issue?

Makeup of the S&P 500 Index companies is different today than 40 years ago

Checking in on earnings estimates

 

Mentioned in this Episode

 

Historical Market returns S&P 500, Tbills, Tbonds, gold, and housing since 1928 from Professor Aswath Damodaran and NYU Stern School of Business

https://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/histretSP.html

 

Derek Moore's book Broken Pie Chart https://amzn.to/3S8ADNT

 

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

 

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

 

Contact Derek derek.moore@zegainvestments.com


Derek Moore hosts Broken Pie Chart, a podcast that digs into the practical realities of managing money in a complex world. The name comes from the idea that traditional, rigid models for investing and planning often don't reflect real life. Each episode takes a specific concept-whether it's portfolio construction, market behavior, or preparing for retirement-and breaks it down into straightforward conversation. You'll hear clear explanations of economic trends and financial principles without the jargon, focusing on how these ideas actually impact personal and professional decisions. This isn't about hot stock tips; it's about building a durable understanding of how markets and the economy function. The goal is to provide listeners with a stronger foundation for their own financial choices, making seemingly opaque topics accessible and relevant. Tune in for a thoughtful, grounded perspective that challenges conventional wisdom and simplifies the complicated.
Author: Language: English Episodes: 100

Broken Pie Chart
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