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Editor's Note: Below is a brief excerpt and chart from today's Early Look written by our analyst Jay Van Sciver. Click here to learn more.

The delinking of valuation from fundamentals isn’t only in financial assets.  Farmland looks as absurd as Rollins, if not Tesla. Farmland Partners, a REIT, lists the “market cap rate based on gross rental income” as 2.8% for corn belt land.  However, farmland prices have started to reset lower and dominates farm balance sheets. 

As we see it, Deere, which reported this morning, is another cyclical that has yet to reflect a decelerating growth environment.  At first read, it looks like a miss with some weak internals on guidance, particularly on US and Canada Ag.  US agricultural equipment inventories are elevated, trade rows have hurt demand for US crops, but farmland is the key valuation anomaly. 

Of course, it isn’t just TSLA, ROL, and farmland – negative interest rates on government debt abound.  The US 30-year yield hit another all-time low yesterday, and it was hard to get a broker on the phone to ask about refinancing. That’s a potential tailwind for our longs in building products, like MHK and OC, and an outstanding call by our firm’s macro team. 

But an all-time low in 30-year yields at the same time as a 50 year low in unemployment? Message boards with Tesla shareholders declaring that they own shares not to make money, but to be part of the ‘transportation revolution’?  Beyond Meat? 

CHART OF THE DAY: Absurdities Abound - zxa