Derek Moore and ZEGA Financial CEO Jay Pestrichelli explore data showing its cheaper to rent vs. buying a home in all but 3 markets. Then they bring up the WSJ article saying companies are “juicing” earnings evidenced by the Beneish-M score and historically whether a high M-score predated market tops. Later they look at how the top 10 market cap weighted companies have changed over the decades and why this supports buying indexes (but being hedged!). Finally, the VIX did something it hasn’t done since….All this and more in this week’s episode.
Where is the homeownership premium the highest?
Cheaper to rent vs own based on data from Redfin and Freddie Mac
Comparing interest portion of mortgages to paying rent
What is the Beneish M-score?
Article by WSJ shows M-score is elevated at market peaks.
A WSJ article says companies are using financial accounting to juice earnings.
Top 10 largest by market cap companies in the S&P 500 index by decade
What about top 10 by market cap companies in the world?
The VIX now has a low not seen for several years.
What is going on in the world of volatility?
Equity market leadership shifts over time
Are Apple, Microsoft and the rest of the FAAMG stocks an exception?
Mentioned in this Episode:
WSJ article Business Is Slowing. So Companies Are Juicing Profits https://www.wsj.com/articles/profit-numbers-get-spruced-up-as-business-slows-8eec5017
WSJ article M-Score Messod D. Beneish Accounting-Fraud Indicator Signals Coming Economic Trouble https://www.wsj.com/articles/accounting-fraud-indicator-signals-coming-economic-trouble-506568a0?mod=article_inline
AI Driving Market Returns? | Size of Top 2 S&P 500 Stocks Now 15%? | Relative Performance of Tech vs S&P 500 Index at Extreme Levels https://podcasts.apple.com/us/podcast/ai-driving-market-returns-size-of-top-2-s-p-500/id1432836154?i=1000613885329
AI Is the New Crypto & Blockchain Post Nvidia Earnings | Reach for Long Duration Bonds | More Fed Rate Increases Coming? | 7% Treasury Bills? https://podcasts.apple.com/us/podcast/ai-is-the-new-crypto-blockchain-post-nvidia-earnings/id1432836154?i=1000614778019
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@example.com