The stock is now up 11% for the year and 13% over the past two weeks. This stock was left for dead in early February, when everyone was freaking out over China and the specter of their ghost cities not needing anymore of CAT’s tractors.
Apparently, rumors of Caterpillars demise have been greatly exaggerated.
The share price action of CAT has been synonymous with Chinese growth. In recent weeks, much of this rally has revolved around the idea that the Chinese economy wasn’t doing as poorly as people suspected. Couple that with the statements from the Fed, who, at the moment, are sounding more dovish, and you have a recipe in place for a sharp rally for stocks.
The only problem with all of this is that it’s 100% horseshit. The Fed are still very much interested in jacking rates until your brain spills out from your ears. China is a fantastic fraud and definitely slowing. Moreover, demand for coal and steel are waning and do not support the share price appreciation for CAT.
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Isn’t some young hot-shot HF guy short this thing?
Is Einhorn crying yet ????
It’s frustrating that China could be raging ahead, stagnating, or plummeting into a chasm, & we could never know for sure, because the government and economy are so lacking in transparency.
Lack of transparency is a huge issue. I am reading a fascinating book about psychopaths, this one:
Snakes in Suits: When Psychopaths Go to Work
http://www.amazon.com/Snakes-Suits-When-Psychopaths-Work/dp/0061147893/ref=sr_1_1?s=books&ie=UTF8&qid=1457369066&sr=1-1&keywords=snakes+in+suits
One of the things the book discusses is how when there is a lot of secrecy in organizations, and when people are afraid to ask questions or say the truth of what’s happening, that psychopaths thrive in that environment of secrecy. Some corporations’ secrecy and lack of transparency has cost them many millions of dollars in stolen money and other losses related to fraud.
Secrecy makes it easy for criminals to hide. And psychopaths thrive on environments lacking in transparency. I guess that is one more reason why fraud seems to be particularly rampant in Chinese companies. If nobody is allowed to know what is going on, then one of the things that is usually going on is fraud.
Caterpillar, that’s what we’re going to build the wall with.
What is your plan for stopping the tunnels ? The wall will be a laughing stock. We need electric zappers to really stop it.