prudentinvestor

Caterpillar, Aluminum Corp. Offer Perspective on Technical vs. Fundamental Investing

Excellent point about the fact that "breaking resistance" on the upside means that it is increasingly likely that most of the gains are behind us.

Like you, I purchased ACH, a little in the low 20's, and more in the mid-low teens, and much, much more under $10. I've unloaded about 10% of it recently at over $30 and plan to keep the rest for a while. Like you, I also got into CAT, mostly in the 20's, but have already unloaded 60% of my position in the mid-high 40's, and will sell more when (if) it breaks through $50.

Unlike you, however, I don't believe that "...Stocks were dirt cheap in October-March based on fundamental factors." I think they were "dirt cheap" compared to the bubblespheric levels of a 15-year era of artificial asset prices that is come and gone. This era cannot be re-created, no matter how egregious the Fed's monetisation program becomes, simply because the requisite, massive rate of price inflation would tear apart the fabric of the economy and society. What the market had priced-in in October-March was the new reality, which some call the "new normal" but I prefer to call it the "old normal". And yes, despite all the cheerleading, we are returning to the old, pre-bubble-era normal economy.

4 Stocks for an Anticipated Industrial Recovery

A reasonable article and selection of stocks for the longer term. Your recommendation of buying CAT in the low 20's sounds good if it gets there again, perhaps in the wake of bad earnings or a dividend cut, as it is now around 30.

Your statement "..... As we can see, the Euro has virtually collapsed against the U.S. Dollar......" strikes me as odd, perhaps the product of a youthfully short time persepctive. When the Euro was created, it was designed to be equivalent to one dollar, and indeed there was a substantial period when a dollar bought you more than one Euro (briefly as much as 1.25 Euros). The Euro cannot be said to "have collapsed against the dollar" unless its value became substantially less than one dollar. What you really mean to say is " the dollar collapse against the Euro has been lessened".

12 Attractive Companies That Also Pay a Dividend

I thought NOK just "suspended" their dividend.

Now that cutting dividends is de rigeur, even companies that don't need to cut them will jump on the bandwagon and take cover in the fact that others are cutting. Executives want all the available cash to buy back shares, so that their options can come back into the money. Paying dividends to the owners (i.e. the shareholders) is too old-fashioned, as it reduces the executives' loot, disguised as options.

On Mar 01 11:56 AM YoMama wrote:

> JNJ and NOK might be the safest payers on this list. Three more to
> consider is PG,KFT and MCD for safety and regular increases. If you
> put stock price movements above the dividends in importance your
> better off staying in cash .

Preview from Europe: Stocks Log Worst January Ever

Mole, thanks for your succinct summary, and particularly for the great Monty Python sketch!

There was another Ponty Python (the "Village Idiot" perhaps?) in which the idiots discuss stock investments intelligently, as the pundits blather stupidly about them. If you can locate it, please consider posting it as appropriate.

Caterpillar to Dealers: As Sales Slow, Cut Inventory

Thanks for the hint. I also owned some CAT, but sold off a couple of years ago when I thought it was too high (turns out I sold much too early in hindsight). I keep watching it, and wondering when to go back in.


On Jan 29 07:35 AM constructe wrote:

> I think CAT is a pretty good company with solid management. Too bad
> it doesn't save them from cyclicality. I have been pondering when
> to buy more since I didn't sell because it was pretty well hedged
> with market puts. Maybe a year from now.
>
> I own Catapillar. I don't reccomend a buy on it at this point in
> time.

Monday Outlook: Earnings - Or Lack Thereof

Congress and President Obama need to address, and possibly recover, bonuses paid by financial companies after they already knew they were insolvent and will have to be bailed out by the public. If the news reports about John Thain's actions at the end of 2007 are correct, they imply that he personally decided that he had the right to disburse billions of taxpayers' funds.