Investing in the strange negative yield world — ‘It’s very hard to wrap your arms around’

That doesn’t mean U.S. Treasury yields will also go negative with the other $15 trillion in negative yielding debt. But some strategists say they could, and at the very least Treasurys should continue to see new low rates as European and other negative yields hit new lows. Yields move opposite price, so in an extremely low yield or negative world, investors hope for price appreciation on instruments where they had once looked for yield. “It’s very hard to wrap your arms around the idea of negati


That doesn’t mean U.S. Treasury yields will also go negative with the other $15 trillion in negative yielding debt. But some strategists say they could, and at the very least Treasurys should continue to see new low rates as European and other negative yields hit new lows. Yields move opposite price, so in an extremely low yield or negative world, investors hope for price appreciation on instruments where they had once looked for yield. “It’s very hard to wrap your arms around the idea of negati
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Company: cnbc, Activity: cnbc, Date: 2019-08-20  Authors: patti domm
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Investing in the strange negative yield world — 'It's very hard to wrap your arms around'

The bond market has entered a financial twilight zone, and at this point, there doesn’t seem to be a smooth way out. For the last several weeks, investors have been watching a swift move lower in global bond yields — with the amount of negative yielding debt increasing to the point where it now equals nearly a third of tradeable bonds worldwide, according to J.P. Morgan. Investors have jumped into the safety of bonds, amid worries the global economy is slowing and that the trade wars will take a bigger toll on growth. Yields are also cascading lower, as global central banks rush to cut interest rates, a factor feeding the downward spiral in yields.

That doesn’t mean U.S. Treasury yields will also go negative with the other $15 trillion in negative yielding debt. But some strategists say they could, and at the very least Treasurys should continue to see new low rates as European and other negative yields hit new lows. Yields move opposite price, so in an extremely low yield or negative world, investors hope for price appreciation on instruments where they had once looked for yield. “It’s very depressing…Just think about it as a saver or investor,” said Michael Schumacher, director rates at Wells Fargo. “It’s very hard to wrap your arms around the idea of negative yields. It doesn’t really sit well…It’s terrible for the financial system. Look how European banks have done for the last six, seven years—very poorly.” As rates drop around the world, the U.S. has become an even more attractive market, for the remaining yield it has and the fact the economy is growing. Contrast that to Germany where its economy is shrinking and the 10-year bund is yielding a negative 0.69%, compared to the U.S. 10-year yield, at 1.54%.

Disorderly and painful

Strategists say the reversal of the bond market trade could be disorderly and painful if it happens quickly. J.P. Morgan strategists point out that four countries — Denmark, Germany, Netherlands and Finland — now have negative yields across their full spectrum of rates. “In our conversations with clients, the experiments of central banks with negative rates are viewed more as a policy mistake rather than stimulus and create a sense of an abnormal and uncertain environment that damages not only banks but also consumer and business confidence,” the J.P. Morgan strategists wrote. The Federal Reserve is expected to cut rates again in September and possibly later, triggering lower interest rates around the world. The differentials between global interest rates is putting pressure on currency moves. “I think the momentum trade is basically saying to the Fed: ‘You’re falling behind the curve.’ The Fed does need to keep up with what’s going on in global markets. The one barometer we have to look at, to make it simple, is the dollar. The stronger the dollar gets, the more negative it is for the global economy,” said Jim Caron, portfolio manager at Morgan Stanley Investment Management. “A lot of the world’s debt is in dollars. The slower the Fed goes, the stronger the dollar gets.” Caron said investors continue to buy bonds for performance, and they are finding it as rates continue to drop. “People are getting socialized to lower yields…It’s bizarre,” said Caron. “It could definitely stay like that for awhile.”

Positioning in the bond market has become so extreme that the rules are being thrown out, and the spiral lower is feeding on itself. U.S. yields are going down as investors that need to hold long term securities move into the long end of the Treasury curve. “I think the main driver right now is basically the lack of foreign yields…Tomorrow, Germany is going to issue a 30-year bond. It’s going to have a zero coupon, but it’s probably going to come at a premium,” said Hans Mikkelsen, head of investment grade corporate strategy at Bank of America Merrill Lynch. “The existing 30-year debt is trading at negative 0.18%.”

‘Self reinforcing’


Company: cnbc, Activity: cnbc, Date: 2019-08-20  Authors: patti domm
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Ray Dalio reveals the ‘most important thing you need to do’ to be a successful investor

If you are going to take investing advice from anybody, Ray Dalio is a good bet. Dalio founded investment firm Bridgewater Associates out of his two-bedroom apartment in New York City in 1975. According to Dalio, “diversifying well is the most important thing you need to do in order to invest well,” he wrote on LinkedIn on Monday. By diversifying, Dalio means spreading out your money into different kinds of investments, such as stocks, bonds, commodities, real estate, etc. Diversification is imp


If you are going to take investing advice from anybody, Ray Dalio is a good bet. Dalio founded investment firm Bridgewater Associates out of his two-bedroom apartment in New York City in 1975. According to Dalio, “diversifying well is the most important thing you need to do in order to invest well,” he wrote on LinkedIn on Monday. By diversifying, Dalio means spreading out your money into different kinds of investments, such as stocks, bonds, commodities, real estate, etc. Diversification is imp
Ray Dalio reveals the ‘most important thing you need to do’ to be a successful investor Cached Page below :
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Ray Dalio reveals the 'most important thing you need to do' to be a successful investor

If you are going to take investing advice from anybody, Ray Dalio is a good bet.

Dalio founded investment firm Bridgewater Associates out of his two-bedroom apartment in New York City in 1975. Currently, Bridgewater Associates has $160 billion in assets under management, making it the largest hedge fund in the world.

According to Dalio, “diversifying well is the most important thing you need to do in order to invest well,” he wrote on LinkedIn on Monday.

By diversifying, Dalio means spreading out your money into different kinds of investments, such as stocks, bonds, commodities, real estate, etc.

Dalio said in the 2016 book “Money Master the Game: 7 Simple Steps to Financial Freedom” by Tony Robbins that a well-diversified portfolio might include 30 percent allocated to stocks, 40 percent to long-term U.S. bonds, 15 percent to intermediate U.S. bonds, 7.5 percent to gold and 7.5 percent to other commodities. A typical portfolio split of half stocks and half bonds is not really diversified, according to Dalio.

Diversification is important because there is so much you don’t know when you are putting your money in an investment, Dalio said in his LinkedIn post.

“It’s very hard to make money in the markets for the same reason that it’s hard to make winning bets at the racetrack: because the unknowns are so large in relation to what is ‘discounted’ or ‘priced in,'” Dalio wrote.


Company: cnbc, Activity: cnbc, Date: 2019-08-14  Authors: catherine clifford
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Hard Brexit would push pressure back on German economy, strategist says


Hard Brexit would push pressure back on German economy, strategist says Cached Page below :
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Hard Brexit would push pressure back on German economy, strategist says


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The student debt crisis has hit black students especially hard. Here’s how

Under the proposal, introduced along with Rep. James E. Clyburn, D-S.C., borrowers with household incomes under $100,000 would get $50,000 of their student debt forgiven. That’s because, by almost every measure, the student debt crisis has hit them especially hard. The average white student loan borrower owes around $30,000; the average black borrower owes closer to $34,000. White borrowers pay down their education debt at a rate of 10% a year, compared with 4% for black borrowers. “The Veterans


Under the proposal, introduced along with Rep. James E. Clyburn, D-S.C., borrowers with household incomes under $100,000 would get $50,000 of their student debt forgiven. That’s because, by almost every measure, the student debt crisis has hit them especially hard. The average white student loan borrower owes around $30,000; the average black borrower owes closer to $34,000. White borrowers pay down their education debt at a rate of 10% a year, compared with 4% for black borrowers. “The Veterans
The student debt crisis has hit black students especially hard. Here’s how Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-07-27  Authors: annie nova
Keywords: news, cnbc, companies, bill, heres, hit, crisis, white, hard, black, herbold, student, especially, students, borrowers, education, college, degree, debt


The student debt crisis has hit black students especially hard. Here's how

When Democratic presidential candidate Elizabeth Warren earlier this week unveiled the details of her bill to cancel student debt, she stressed how it would deliver significant financial relief to borrowers of color.

“The day our bill gets signed into law, that black-white wealth gap would shrink by 25 points,” the Massachusetts senator said. Under the proposal, introduced along with Rep. James E. Clyburn, D-S.C., borrowers with household incomes under $100,000 would get $50,000 of their student debt forgiven. Higher earners would get a smaller share of their debt voided.

Black borrowers do stand to benefit greatly from Warren’s bill. That’s because, by almost every measure, the student debt crisis has hit them especially hard.

“The racial wealth gap is both the biggest and has grown the fastest among those with a college education,” said Jason Houle, assistant professor of sociology at Dartmouth College. “[S]tudent loan debt [is] potentially one thing that explains why that’s happened.”

Nearly 85% of black bachelor’s degree recipients carry student debt, compared with 69% of white bachelor’s degree recipients, according to the Center for Responsible Lending, a non-profit in Durham, N.C.

The average white student loan borrower owes around $30,000; the average black borrower owes closer to $34,000. White borrowers pay down their education debt at a rate of 10% a year, compared with 4% for black borrowers. Nearly 38% of all black students who entered college in 2004 had defaulted on their student loans within 12 years, a rate more than three times higher than their white counterparts, according to the Brookings Institute.

To understand why debt weighs heavier on black Americans than their white counterparts, you have to look into the past, said Julia Barnard, a student debt expert at the Center for Responsible Lending. “There’s structural discrimination,” Barnard said. “It’s a larger civil rights issue.”

The promise of the G.I. Bill — which offered tuition assistance to Americans who had served in the armed forces — went largely unfulfilled for African Americans, writes Hilary Herbold in an article for The Journal of Blacks in Higher Education.

The law, passed in 1944, didn’t discriminate by race, at least in the education benefits provision, but its terms were “interpreted one way for blacks and another for whites,” Herbold writes. She tells the story of a black veteran who already had a bachelor’s degree but sought to use his G.I. Bill benefits to complete a master’s degree. “The Veterans Administration denied the claim, informing him that he needed no further education,” Herbold writes.

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Even for black veterans who were offered tuition assistance by the government, there was the challenge of finding a seat on campus. Fewer historically black colleges existed back then, and other colleges set official or unofficial quotas on how many black students they would admit.

“White institutions in both the North and South were essentially closed to blacks in the 1940s,” Herbold writes. At the University of Pennsylvania in 1946, for example, just 46 out of 9,000 students were black.

More African Americans are attending college today than ever before. Nearly 1 in 4 black people between the ages of 25 and 29 hold a college degree, up from 1 in 10 in 1968. As colleges become more diverse, however, they’ve also become exponentially more expensive. One year at a nonprofit, four-year private college, including tuition, room and board, currently costs $48,510, compared with $22,240 in 2000, according to Mark Kantrowitz, the publisher of SavingForCollege.com.


Company: cnbc, Activity: cnbc, Date: 2019-07-27  Authors: annie nova
Keywords: news, cnbc, companies, bill, heres, hit, crisis, white, hard, black, herbold, student, especially, students, borrowers, education, college, degree, debt


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Battling flood damage? Why you’ll have a hard time getting a tax break for it

NASA | ReutersHomeowners dealing with damage from summer storms have another disappointment ahead: They may not be able to get a tax break for their losses. That’s because a provision in the Tax Cuts and Jobs Act – the tax code overhaul that went into effect in 2018 – limits the extent to which you can claim a deduction for property damage. You can now only get a tax break if the damage is due to a federally declared disaster. “It was always a difficult deduction to claim,” said Robert Westley,


NASA | ReutersHomeowners dealing with damage from summer storms have another disappointment ahead: They may not be able to get a tax break for their losses. That’s because a provision in the Tax Cuts and Jobs Act – the tax code overhaul that went into effect in 2018 – limits the extent to which you can claim a deduction for property damage. You can now only get a tax break if the damage is due to a federally declared disaster. “It was always a difficult deduction to claim,” said Robert Westley,
Battling flood damage? Why you’ll have a hard time getting a tax break for it Cached Page below :
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Battling flood damage? Why you'll have a hard time getting a tax break for it

Tropical Storm Barry is shown in the Gulf of Mexico approaching the coast of Louisiana, in this July 11, 2019 NASA satellite handout photo. NASA | Reuters

Homeowners dealing with damage from summer storms have another disappointment ahead: They may not be able to get a tax break for their losses. That’s because a provision in the Tax Cuts and Jobs Act – the tax code overhaul that went into effect in 2018 – limits the extent to which you can claim a deduction for property damage. You can now only get a tax break if the damage is due to a federally declared disaster. “It was always a difficult deduction to claim,” said Robert Westley, CPA and member of the American Institute of CPAs’ Financial Literacy Commission. “And now it’s even harder.”

Residents don’t have to be at the epicenter of a hurricane to feel its effects. For instance, Hurricane Barry made landfall in Louisiana on Saturday, July 13. As the storm continued north and dissipated, residents as far as New York and New Jersey dealt with torrential rains and flooding from Barry’s remnants. As of July 9, there were six weather and climate disaster events with losses exceeding $1 billion, according to the National Oceanic and Atmospheric Association. There could be nine to 15 named storms in 2019, according to NOAA. The Atlantic hurricane season runs from June 1 to Nov. 30.

Law changes

The Internal Revenue Services offices in Washington, D.C. Adam Jeffery | CNBC

Before the new tax law, taxpayers who itemized deductions on their federal return could claim property losses that weren’t reimbursed by insurance and that were the result of natural disasters, accidents, fires and more. Now you can only claim this deduction if the damage is attributable to a federally declared disaster. This change is in effect from 2018 through the end of 2025. Your total losses must be more than 10% of your adjusted gross income. Further, the new tax law also raised the standard deduction ($12,200 for single filers and $24,400 for married-filing-jointly in 2019), roughly doubling it from its prior levels.

It was always a difficult deduction to claim, and now it’s even harder. Robert Westley CPA and member of the American Institute of CPAs’ Financial Literacy Commission

As a result, fewer taxpayers are likely to itemize deductions on their returns — meaning even fewer people will be able to write off casualty losses, Westley explained. In all, 154,274 taxpayers filed returns claiming casualty and theft losses in 2016, according to the most recent data available from the IRS. “In the past, maybe the tax benefit provided some relief,” Westley said. “That relief is more or less gone.” Homeowners should bolster their own finances and review their insurance coverage to make sure they’re prepared for a disaster, he said.

Preparing for disasters

Stores along Main Street sustained severe damage after a storm system dumped over 9-inches of rain in about a two-hour span on Sunday, and workers begin the task of cleaning up May 29, 2018 in Ellicott City, MD. (Photo by Katherine Frey/The Washington Post via Getty Images) Katherine Frey | The Washington Post | Getty Images


Company: cnbc, Activity: cnbc, Date: 2019-07-19  Authors: darla mercado
Keywords: news, cnbc, companies, deduction, claim, westley, getting, youll, losses, taxpayers, hard, tax, damage, washington, storm, disaster, break, battling, flood


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Why good chocolate ice cream is so hard to make and other secrets of Jeni’s ice cream

8:55 AM ET Sun, 21 July 2019To view this site, you need to have JavaScript enabled in your browser, and either the Flash Plugin or an HTML5-Video enabled browser. Download the latest Flash player and try again. Jeni Britton Bauer’s love affair with ice cream goes back decades. And now, with 25 years of industry experience, she’s surpassed $42 million in sales with her company Jeni’s Splendid Ice Creams in 2018. Here’s a look into how starting in Columbus, Ohio, set her up for success.


8:55 AM ET Sun, 21 July 2019To view this site, you need to have JavaScript enabled in your browser, and either the Flash Plugin or an HTML5-Video enabled browser. Download the latest Flash player and try again. Jeni Britton Bauer’s love affair with ice cream goes back decades. And now, with 25 years of industry experience, she’s surpassed $42 million in sales with her company Jeni’s Splendid Ice Creams in 2018. Here’s a look into how starting in Columbus, Ohio, set her up for success.
Why good chocolate ice cream is so hard to make and other secrets of Jeni’s ice cream Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-07-19
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Why good chocolate ice cream is so hard to make and other secrets of Jeni's ice cream

8:55 AM ET Sun, 21 July 2019

To view this site, you need to have JavaScript enabled in your browser, and either the Flash Plugin or an HTML5-Video enabled browser. Download the latest Flash player and try again.

Jeni Britton Bauer’s love affair with ice cream goes back decades. And now, with 25 years of industry experience, she’s surpassed $42 million in sales with her company Jeni’s Splendid Ice Creams in 2018. Here’s a look into how starting in Columbus, Ohio, set her up for success.


Company: cnbc, Activity: cnbc, Date: 2019-07-19
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Cramer: Netflix went from ‘easy money to hard money’ in one fell swoop

In one fell swoop, Netflix went from easy money to hard money,” the “Mad Money” host said. Netflix shares surged in January after the video platform announced that it would raise prices between 13% and 18%. “I have a very simple rule of thumb, here in Cramerica: Always go for the easy money not the hard money, no matter how much you might be tempted.” And if you have to guess, it’s no longer easy money, it’s hard,” the host said. And I’d much rather chase easy money every day of the week than ha


In one fell swoop, Netflix went from easy money to hard money,” the “Mad Money” host said. Netflix shares surged in January after the video platform announced that it would raise prices between 13% and 18%. “I have a very simple rule of thumb, here in Cramerica: Always go for the easy money not the hard money, no matter how much you might be tempted.” And if you have to guess, it’s no longer easy money, it’s hard,” the host said. And I’d much rather chase easy money every day of the week than ha
Cramer: Netflix went from ‘easy money to hard money’ in one fell swoop Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-07-18  Authors: tyler clifford
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Cramer: Netflix went from 'easy money to hard money' in one fell swoop

The once-consistent Netflix has “suddenly become erratic” as investors grapple with the company’s second-quarter subscriber woes, CNBC’s Jim Cramer said Thursday.

The share price tumbled more than 10% during the session and the reaction from portfolio managers influenced moves in the rest of the market as the averages digested earnings, he said. The Dow Jones Industrial Average added a little more than 3 points, snapping a two-day losing streak. The S&P 500 gained 0.36% and the Nasdaq Composite rose 0.27%.

“We’ve seen Netflix stumble before, especially maybe after a price hike, but not quite like this. In one fell swoop, Netflix went from easy money to hard money,” the “Mad Money” host said. “In a single quarter, Wall Street went from sanguine to skeptical.”

Netflix shares surged in January after the video platform announced that it would raise prices between 13% and 18%. A basic plan was increased to $9 from $8 and its most expensive plan increased to $16 from $14.

The domestic subscription based shrunk by 126,000 in the second quarter, which Netflix attributed to multiple factors including regional price increases and a “pull-forward effect” from the first quarter.

“I’ll blame myself. I got it wrong,” Cramer said. “We thought Netflix was the kind of company that could raise prices with impunity. If that’s not the case, we need to take it out of the bin of consistency and put it in the bin of the episodic and perhaps even, heaven forbid, dispensable.”

Netflix also faces more competition from companies such as Disney and Comcast-subsidiary NBCUniversal, who have plans to launch their own streaming services and pull their respective popular TV shows “The Office” and “Friends” from the platform. Last month, Cramer ranked Netflix second to Disney on his list of the top seven streaming services to invest in.

For the amount of content that consumers can get on Netflix, the host said he thought a price increase would not have a negative impact on the subscriber base.

“This makes it a much less compelling story,” he said. “I have a very simple rule of thumb, here in Cramerica: Always go for the easy money not the hard money, no matter how much you might be tempted.”

Cramer said that Netflix can no longer be compared to the likes of Costco, Amazon Prime, Spotify or Apple, who all offer services people are willing to pay for “without thinking about it.” He’s not alone: Gene Munster, founding partner of Loup Ventures, said he thinks the company’s best days are behind it.

“If it’s not part of that club, you have to guess how much people are willing to shell out what they’re paying. And if you have to guess, it’s no longer easy money, it’s hard,” the host said.

Netflix’s stock price lost more than 37 points, closing down Thursday at $325.21 per share. Shares are up more than 21% in 2019, but down more than 13% in the past year.

“I’m not saying it’s a bad story, maybe it’s already making a comeback,” Cramer said. But, then again, maybe it’s not — and that’s why it’s hard money. And I’d much rather chase easy money every day of the week than hard money ever.”

Disclosure: Cramer’s charitable trust owns shares of Amazon, Apple, Disney and Comcast. NBCUniversal is the parent company of CNBC.


Company: cnbc, Activity: cnbc, Date: 2019-07-18  Authors: tyler clifford
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Netflix just missed hard on the only number that matters — international subscriber growth

Netflix shares are tanking almost 11 percent after-hours following the company’s Q2 earnings report on Wednesday afternoon, but before you get wrapped up in false narratives, understand that Netflix trades on international growth. The reason Netflix shares are falling is because international net additions were 2.8 million. Netflix can sustain its lofty valuation only if global subscriber growth can support increasing content spending and debt. If Netflix misses by that much — 42 percent — on in


Netflix shares are tanking almost 11 percent after-hours following the company’s Q2 earnings report on Wednesday afternoon, but before you get wrapped up in false narratives, understand that Netflix trades on international growth. The reason Netflix shares are falling is because international net additions were 2.8 million. Netflix can sustain its lofty valuation only if global subscriber growth can support increasing content spending and debt. If Netflix misses by that much — 42 percent — on in
Netflix just missed hard on the only number that matters — international subscriber growth Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-07-17  Authors: alex sherman
Keywords: news, cnbc, companies, valuation, net, additions, shares, netflix, growth, understand, matters, missed, number, international, subscriber, hard, wrapped, trades


Netflix just missed hard on the only number that matters — international subscriber growth

Netflix shares are tanking almost 11 percent after-hours following the company’s Q2 earnings report on Wednesday afternoon, but before you get wrapped up in false narratives, understand that Netflix trades on international growth.

The reason Netflix shares are falling is because international net additions were 2.8 million. Analysts thought that number would be closer to 4.8 million.

Netflix can sustain its lofty valuation only if global subscriber growth can support increasing content spending and debt. And growth is entirely dependent on Netflix’s prospects internationally, in countries such as India and Malaysia. If Netflix misses by that much — 42 percent — on international net additions, the stock is going to get hammered.

The bigger question is why Netflix missed by that much.


Company: cnbc, Activity: cnbc, Date: 2019-07-17  Authors: alex sherman
Keywords: news, cnbc, companies, valuation, net, additions, shares, netflix, growth, understand, matters, missed, number, international, subscriber, hard, wrapped, trades


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Cramer: Sam Adams-parent Boston Beer is the comeback stock to own

CNBC’s Jim Cramer on Wednesday recommended investors buy into the turnaround story of Boston Beer Company. Sam Adams’ growth slowed dramatically in 2015 followed by two years of declines, and Cramer said he gave up on it when the stock crumbled. “That’s what makes Boston Beer’s comeback so stunning,” Cramer said. Boston Beer has run more than 60% year to date, pulling back from an all-time high of $401.05 — set Monday. “I think Boston Beer’s run so much that it could sell off hard next week,” Cr


CNBC’s Jim Cramer on Wednesday recommended investors buy into the turnaround story of Boston Beer Company. Sam Adams’ growth slowed dramatically in 2015 followed by two years of declines, and Cramer said he gave up on it when the stock crumbled. “That’s what makes Boston Beer’s comeback so stunning,” Cramer said. Boston Beer has run more than 60% year to date, pulling back from an all-time high of $401.05 — set Monday. “I think Boston Beer’s run so much that it could sell off hard next week,” Cr
Cramer: Sam Adams-parent Boston Beer is the comeback stock to own Cached Page below :
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Keywords: news, cnbc, companies, adamsparent, truly, boston, comeback, sam, beers, beer, growth, stock, hard, cramer, sell, adams


Cramer: Sam Adams-parent Boston Beer is the comeback stock to own

CNBC’s Jim Cramer on Wednesday recommended investors buy into the turnaround story of Boston Beer Company.

The Samuel Adams beer maker, after years of declining revenue, has seen its share price more than double and break above $400 in “one of the most spectacular comebacks I’ve ever witnessed,” the “Mad Money” host said.

“Losing stocks can become winners again when bold management makes smart decisions and bites the bullet,” he said. “I think this is an important story because it shows you how companies that were written off and left for dead can, indeed, make themselves relevant again if they have great management.”

Sam Adams, Boston Beer’s flagship brand, posted double digit growth as high as 27% in the early 2010s until smaller craft breweries opened across the country and began attracting attention. Sam Adams’ growth slowed dramatically in 2015 followed by two years of declines, and Cramer said he gave up on it when the stock crumbled.

In 2017, CEO Martin Roper retired and Boston Beer began investing in marketing and product development outside the slowing beer category, which included focusing on the popular Angry Orchard Cider and Twisted Tea business segments and launching the hard seltzer brand Truly. Truly is the “pillar of the turnaround” and it’s paying off, Cramer said.

Dave Burwick, a Boston Beer board member and former chief of Peet’s Coffee, became CEO of the company in February 2018, and founder Jim Koch stayed on as chairman to help guide the ship.

In an April conference call, Burwick told shareholders, “Truly continues to grow beyond our expectations. We’re expanding distribution across all channels and improving our position as a leader in hard seltzer as more competitors enter the category.”

“That’s what makes Boston Beer’s comeback so stunning,” Cramer said. It’s risky, but “Boston Beer understood that you can’t be a growth company unless you’re willing to spend money to improve your business.”

In April 2018, sales of the aforementioned non-beer bottles helped offset the continued losses in Sam Adams, and Boston Beer saw its stock gain $100 per share, reaching $300 by the end of June 2018.

“The key metric in the spirits industry is called depletions — shipments to retailers — and Boston Beer’s depletions were up 8%, and that translated to almost 18% revenue growth,” Cramer said.

Skeptics were still abound. The stock fell during the marketwide fourth-quarter selloff, and UBS in December gave it a sell rating at a $228 price target. Shares bottomed below $231 in January and again climbed above $300 in March. Goldman Sachs downgraded the equity to sell in April, but shares closed Wednesday’s session above $390.

Boston Beer has run more than 60% year to date, pulling back from an all-time high of $401.05 — set Monday.

“I don’t want to give anyone a hard time, though, on this one because I missed it, too,” Cramer said. “But they keep proving the skeptics wrong … every step of the way.”

Last week, Guggenheim upped its price target to $421, predicting more years of successful growth on the back of Truly.

Cramer thinks the stock is too expensive trading at 39-times next year’s earnings estimates, but an opportunity to buy may be on the horizon.

“I think Boston Beer’s run so much that it could sell off hard next week,” Cramer said. “If that happens, use the weakness to do some buying. Otherwise, keep your bat on your shoulder and wait for another pitch.”


Company: cnbc, Activity: cnbc, Date: 2019-07-17  Authors: tyler clifford
Keywords: news, cnbc, companies, adamsparent, truly, boston, comeback, sam, beers, beer, growth, stock, hard, cramer, sell, adams


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Richard Branson warns the pound will ‘collapse to parity’ with the dollar in a hard Brexit

The U.K. leaving the European Union without a deal on October 31 would cause the pound to reach “parity” with the dollar, Virgin boss Richard Branson has said. Branson identified Virgin Atlantic as being particularly susceptible to the plummeting pound. “The pound will collapse to parity with the dollar if there is a hard Brexit,” he said, explaining that all of Virgin Atlantic’s costs are in dollars and projecting a “bottom line hit” of around $100 million. “It obviously is going to result in u


The U.K. leaving the European Union without a deal on October 31 would cause the pound to reach “parity” with the dollar, Virgin boss Richard Branson has said. Branson identified Virgin Atlantic as being particularly susceptible to the plummeting pound. “The pound will collapse to parity with the dollar if there is a hard Brexit,” he said, explaining that all of Virgin Atlantic’s costs are in dollars and projecting a “bottom line hit” of around $100 million. “It obviously is going to result in u
Richard Branson warns the pound will ‘collapse to parity’ with the dollar in a hard Brexit Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-07-11  Authors: elliot smith
Keywords: news, cnbc, companies, virgin, european, warns, richard, parity, pound, dollar, branson, uk, union, hard, collapse, result, brexit


Richard Branson warns the pound will 'collapse to parity' with the dollar in a hard Brexit

The U.K. leaving the European Union without a deal on October 31 would cause the pound to reach “parity” with the dollar, Virgin boss Richard Branson has said.

In an interview with the BBC, Branson said a hard Brexit would be “devastating for many Virgin companies,” and would force the group to move investment away from the U.K.

A hard Brexit is one in which along with leaving the European Union, the U.K. also leaves both the European single market and the customs union, eradicating existing free trade agreements with the bloc.

Branson identified Virgin Atlantic as being particularly susceptible to the plummeting pound.

“The pound will collapse to parity with the dollar if there is a hard Brexit,” he said, explaining that all of Virgin Atlantic’s costs are in dollars and projecting a “bottom line hit” of around $100 million.

“A hard Brexit will result in the freight that we get from Europe, that we put on Virgin Atlantic going to America, just disappearing – we won’t get any of that freight, so that would be another $100 million just down the drain, and I could carry on,” he told the BBC.

“It obviously is going to result in us spending a lot less money in Britain and just putting all our energies into other countries,” Branson added.

Boris Johnson, the most likely candidate to replace British Prime Minister Theresa May, has vowed to take the U.K. out of the EU with or without a deal in place, and has refused to rule out suspending parliament in order to push the departure through.

The pound was trading just above the significant $1.25 marker on Thursday, having broken below it earlier in the week.


Company: cnbc, Activity: cnbc, Date: 2019-07-11  Authors: elliot smith
Keywords: news, cnbc, companies, virgin, european, warns, richard, parity, pound, dollar, branson, uk, union, hard, collapse, result, brexit


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