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Thursday, February 20, 2014

V.I.P. Modeling Agency | Backup In Rates

V.I.P. Modeling Agency reminds you that a backup in rates would actually be good for the market, but it could hurt some sectors. The ones I worry about most in the S&P are utilities and telecom, which are actually trading at pretty ridiculous multiples at this point. I mean, it kind of feels like the bond bubble moved into the equity market and pushed up the valuations of the bond proxies, which are regulated utilities, telecom, tobacco stocks. These are all quite expensive. And I think that they could sell off pretty dramatically if we get a meaningful increase in interest rates.



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