41 PE way out of whack with growth rate. Food input costs rising sharply, as are wage costs. End of quarter "window dressing" over. Could see a $10-20 correction to bring it down to a more reasonable valuation level.
Scariest thing is they will also get smoked if economy stays hot or gets hotter--ates rise!
Scenario 1: economy weakens--"junk" bonds drop as default fears rise.
Scenario 2: economy stays strong or gets stronger: yields rise.
Eirher way, longs lose. Sell HYG.
Is the flame of genius extinguished? Now a nation of charity takers & tax cheats? My how times have changed in 2500 years.
Spreads with treasuries don't leave much room for an economic slowdown, which could be terrible for principle value of high yield bonds. Disclosure: long HYG puts.
Spread between junk & treasuries is so low. I think HYG tests $80.
Don't get no "house calls" with my puts. Sleep very well at night.
Water damage to corn/wheat/soybeans. many fields ponded. yellow & stunted corn. Some rports of disease on AGWEB crop comments. Buy JJG, DBA, CORN. As far as DBA goes, which includes some sugar, there is a severe drought in the Antilles growing area.
1. Puerto Rico default looms & Puerto rico is not the only troubled entity.
2. Insuring agencies stock prices waaaay down, indicating fears that they may not be able to cover losses in worst case scenario.
Take your profits like the I-man.
Governor of Puerto Rico said today it cannot pay its $70 billion in debts.
"GAAP" stands for Generally Accepted Accounting Procedures (or practices)"
GAAP PE would be over 1000, more than 10 times non GAAP. GAAP PE takes out employee compensation & options, and most comapnies report GAAP. Article says AMZN and a few others don't.