Caterpillar Is The Poster Child For Overvalued Market (Video)

| About: iShares China (FXI)
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We discuss China's credit bubble, real estate bubble, and non-performing loan bubble in relation to Caterpillar (NYSE:CAT), a stock up $30 on a substantial decline in earnings and revenue growth. We think ultimately CAT will cut its dividend, something a lot of E&Ps will also be forced to come to terms with.

Current institutional owners of this stock should be dumping this overvalued stock, not to mention any retail holders, as we think CAT is going to retest the $60 a share level over the next two years. CAT could very easily be a $20 stock in five years as the ZIRP Free Money Party comes to an end, taking stocks with declining revenues where they would otherwise trade without Central Bank excesses.