Industrial Insight

CAT… | June 5, 2013

http://app.hedgeye.com/unlocked_content/28943-long-cat-be-careful

06/04/13 03:27 PM EDT

Long CAT? Be Careful

For CAT longs, the renewed slide in iron ore prices should be a cause for concern.

Recently, iron ore has been a key correlate for the relative performance of shares, as iron ore mine expansions are a major end-market. We believe CAT and other capital equipment suppliers to resource-related industries are in the midst of a long and significant decline in demand as resource capital spending returns to normal (i.e. not far from depreciation) levels.

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I'm the executive vice president for a steel casting trade association, the Steel Founders' Society of America. I've got a crazy wife, five crazy children, three crazy people that married into the family, and two crazy fun little grandsons.

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