Volatility Problem | Probability S&P 500 Goes Up or Down 9.8% | Cracks in Economy? | Earnings Estimates Rise

Broken Pie Chart

Derek Moore is back to go over some bullish and bearish economic and market items. Avocado prices are spiking while lumber prices are falling. Divergence between the Trucking Tonnage Index vs the S&P 500 Index. Later we discuss the lack of historical volatility in the market given we haven’t had a greater than 2.05% down day for over 375 days. Then taking listener questions around the probability a market goes up or down 9.8% and what goes into calculating option probabilities. Finally, Derek explains the “Volatility Problem” from a listener question comparing the difference between average returns and CAGR compounded annualized growth rate.

What is the volatility problem?

CAGR Compounded Annualized Growth Rate

Average return vs CAGR return and why it matters

Avocado vs Lumber prices

Trucking Tonnage Index vs the S&P 500 Index

EconPi median of coordinates showing decline quad for economy

Economic surprise index explained

Why hedging makes sense to manage volatility

Mentioned in this Episode

Econ PI site http://econpi.com/index.php

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

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

Contact Derek [e-mail]

www.zegafinancial.com