Pizza, and interest rates
I went looking for an old tweet to highlight just how anomalous (stronger words could apply) it was that CSL was trading at the same multiple as DMP.
Funnily enough, whilst it feels like a long time ago, that was only at the back end of last year, when DMP was at $120.
However, the bit on DMP is just the end punchline of a thread about interest rates, in the form of a case study I laid out about how to get to 3% for the US 10 year, and that certainly 2.50% should not have surprised anyone based on even relatively simple modelling.
That has worked out really well and is worth exploring.
I wrote the note here, too, on this blog, which is perfectly searchable, but I also wanted to see if the Twitter links behave themselves. The thread is fun, and the bit about DMP is at the bottom.
Anyway, returning to the present, and noting US 10s are at 2.90% and DMP is near $60, paying 50x forward earnings for a pizza franchise is worth reflecting on.
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