From Forbes:
China, the end of the commodities supercycle and accounting issues.Here's the 5-year chart from Yahoo Finance, top tick was $116.95 on Feb. 24, 2012:
In short, that’s why hedge fund manager James Chanos is shorting Caterpillar CAT -1.87%.
Those were the takeaways from the Kynikos Associates founder’s remarks at the CNBC/Institutional Investor Delivering Alpha conference Wednesday.
After briefly explaining that his firm is still short his idea from last year, despite that stock’s year-to-date surge, Chanos said he is taking on another iconic American company, Caterpillar.
The construction and mining equipment maker has enjoyed the benefits from a “once in a generation, if not once in a lifetime,” growth in infrastructure investment thanks to the buildout of China, a trend he thinks is coming to an end.
Caterpillar has 30% of its revenue and half of its operating profits tied to global mining capital expenditures, Chanos says, and the hockey stick growth of that spending over the last decade-plus is waning.
“One third of global mining cap-ex is equipment, and that lands you in Peoria, Ill., at the doorstep of Caterpillar,” the hedge fund manager said....MORE
