March 28, 2017
We have never paid much attention to AmeriGas. But a recent article sparked out interest and we are BUYING.
We are buying the bond for 5.5% at maturity (which is good in this lousy environment), BUT you can also buy the stock APU for a very nice 8%. If you don’t want to hold bonds, you can take the higher risk and go for the stock.
Bond CUSIP 030981AH7 Mature May 2024. 5.5%
(From Yahoo) AmeriGas Partners, L.P. through its subsidiary, AmeriGas Propane, L.P., distributes propane and related equipment and supplies in the United States. It serves approximately 1.9 million residential, commercial, industrial, agricultural, wholesale, and motor fuel customers in 50 states through approximately 1,900 propane distribution locations. The companys propane is used for home heating, water heating, and cooking purposes; to fire furnaces, as a cutting gas, and in other process applications; as a supplemental fuel and motor fuel; and for tobacco curing, chicken brooding, crop drying, and orchard heating applications. It also sells, installs, and services propane appliances, such as heating systems; and offers residential heating, ventilation, air conditioning, plumbing, and related services. The company markets propane and other services primarily under the AmeriGas, America’s Propane Company, Heritage Propane, Relationships Matter, Metro Lawn, and ServiceMark names. AmeriGas Propane, Inc. serves as the general partner of the company. AmeriGas Partners, L.P. was founded in 1994 and is based in King of Prussia, Pennsylvania.
Rumors have it that Hillary is planning on the next presidential campaign LOLOL. She is just not going to give it up. Rumors say that she is building her new inner circle, and Huma her “girl friend” (wink, wink) is already back. She would be 73 years old IF, IF she wins. (OMG why don’t the Clintons just go away.)
The End Of The Bond Bubble
The problem with most of the forecasts for the end of the bond bubble is the assumption that we are only talking about the isolated case of a shifting of asset classes between stocks and bonds.
However, the issue of rising borrowing costs spreads through the entire financial ecosystem like a virus. The rise and fall of stock prices have very little to do with the average American and their participation in the domestic economy. Interest rates, however, are an entirely different matter.
While there is not much downside left for interest rates to fall in the current environment, there is also not a tremendous amount of room for increases. Since interest rates affect “payments,” increases in rates quickly have negative impacts on consumption, housing, and investment.
Will the “bond bull” market eventually come to an end? Yes, eventually. However, the catalysts needed to create the type of economic growth required to drive interest rates substantially higher, as we saw previous to 1980, are simply not available today. This will likely be the case for many years to come as the Fed, and the administration, come to the inevitable conclusion that we are now caught in a “liquidity trap” along with the bulk of developed countries.
I am long bonds and continue to buy more whenever someone claims the “Great Bond Bull Market Is Dead.”