It is an opportunity that is particularly well suited for this time in the economic cycle per the list of questions above. This document’s goal is to introduce global opportunistic yield and credit-oriented investors to a uniquely off market, large-scale opportunistic credit investment opportunity in Brazil Farmland Finance. What if this opportunity was in a hard currency (Euro or Dollars), offered high yield credit, fully collateralized, and in perhaps the most essential industry in a location that has arguably the world’s most productive and cost competitive production, combined with a strong secular demand story?ĭid you guess agricultural production in Brazil? Welcome to the World of Captain Obvious, Brazil Farm Finance! Soon all will be clear and well… rather obvious!Ĭaptain Obvious, High US$ Yield, and Brazil Farm Finance Does it have a significant yield spread per a recapitalization?.Can the investor build a platform to profit off of these trends in a specific way?.
Captain obvious capitals how to#
American weekly grocery spending increased by 17% overall in 2020 following a LendingTree poll of consumers, and between May and October meat sales increased by 30%, compared to the same period in 2019, based on data from Grocery Drive.Ī key consideration that an opportunistic credit-oriented investor must examine is how to make a high risk-adjusted return in the situation above. Grocery sales also surged in the US last year. And the average home price was $266,104 in December, up 8.4%, or $20,587 over the previous year, according to Zillow. In the United States, for example, 5.64 million homes were sold in 2020, up 5.6% from 2019. Pandemic or no pandemic, people will still need to eat and live somewhere. Third, with all the significant changes of 2020, besides technology and remote work related businesses like Zoom that have done extremely well, and largely rightly so, a second reality is that businesses that sell essentials are thriving. And Tesla’s stock price increased by 808% between September 2019 and September 2020. In 2020, nearly 200 SPACs went public and raised about US$ 70B, according to Barron’s. One can argue that there is perhaps almost too much money in the financial system. Second, and related to this low-interest rate environment, there is an almost desperate search for yield, particularly in hard currency (US$ or Euro). For example, China’s government debt RMB denominated interest rate of 3.85% is considered a store of value for the first time for many yield-oriented investors. So much so that the traditional “stores of value” and where to search for “risk-free” yield have changed. One, of course, is that Western Economies, for likely at least the medium term, are in a very low-interest-rate environment. And if one looks in the right places, what may have not been immediately apparent can quickly become quite obvious. Yet, there are still several discernible, strong trends and movements. Mushkin took his price target to $298 from a prior $320 while a “Hold” rating was maintained.Given the events of the last year, many of us in the global opportunistic credit-oriented investor community have shortened our time horizon for predictions and forecasts. “With that liquidity reversing with no real end in sight we thought it prudent to move numbers lower.” “Even though we do give some credence to this idea, the housing market, in our minds, does again have some characteristics of a market that has moved too far, too fast spurred on by a very easy Fed,” Mushkin explained. He noted that while he understands arguments that the home improvement sector has overcorrected, he cannot subscribe to that line of thinking entirely. “This move is perhaps a “captain obvious” exercise given significant swoon in the equity (it has underperformed the broader market), yet we needed to get our outlook in line with what seems like will be a more difficult climate,” Mushkin explained. He also turned his expectation for fourth quarter comparable sales to a 1% decline from a prior positive expectation. Mushkin moved full-year EPS estimates for 20 to $16.45 and $16.53, respectively. Home Depot’s ( NYSE: HD) earnings expectations were reeled in by R5 Capital analyst Scott Mushkin amid housing market turmoil.
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