Markets Getting Overvalued? | MicroStrategy Convertible Bonds| 1st Year Presidential Cycle | 2025 Year End S&P 500 Targets Lazy?| MicroStrategy Option Volatility
By Derek Moore
Show Summary:
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!
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Topics Include:
- 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
Charts Discussed in This Episode
Source: CNBC
Source: Bloomberg
Source: Bloomberg; Fidelity Jurian Timmer
Source: Carson Investment Research
Source: Bloomberg
Source: Bloomberg
Source: The Daily Shot
Source: The Daily Shot
Mentioned in this Episode
Historical Market returns S&P 500, T-bills, Bonds, gold, and housing since 1928 from Professor Aswath Damodaran and NYU Stern School of Business
Jay Pestrichelli’s book Buy and Hedge
Derek’s new book on public speaking Effortless Public Speaking
Derek Moore’s book Broken Pie Chart
Contact Derek derek.moore@zegainvestments.com
Last Week’s Episode:
Nvidia Gets Cheaper?|Buying Bitcoin vs Michael Saylor’s MicroStrategy | Dominos vs. Google | Historical Post Election Markets | Morgan Stanley Says 6500 SPX in 25’
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