Caterpillar Stock has been in my portfolio on and off for many years. 2013 marked the first year however where I started trading CAT Stock regularly. In 2013 the return was 27% against capital in use. The return in 2014 matched the gains made in 2013 at 28%.
But whereas a lot of trades were done in 2013, 2014 saw fewer trades and more periods where I indicated Caterpillar Stock was overvalued and I did not wish to risk my capital in the stock. In particular on Nov 14 I wrote on the Cat Stock Trade Summary that the stock was overvalued and I was staying out of Caterpillar Stock until it came back to the mid 80’s. The only thing that would have changed my outlook would have been increasing revenue numbers from Caterpillar Stock which has not yet happened.
Caterpillar Stock Chart to Mar 20 2015
Looking at the chart below we can see that Caterpillar Stock is back within fair value after falling below $100 and $90. Both of the higher valuations were somewhat puzzling as the stock kept rising despite repeated economic signals globally that continually pointed to slowing economic growth around the world. Caterpillar Stock is one of those “bellwether” stocks that some investors follow. It is the largest machinery manufacturer in the world that has operations globally. When the world’s economies are humming along, Caterpillar Stock is also rising. But when the economies are slowing, the stock normally falls. This did not happen until this past January.
Enjoying The Decline In CAT Stock
Since the decline in Caterpillar Stock my trades have resumed with excellent results. While other investors are perhaps not too pleased with the decline in Caterpillar Stock, I am definitely enjoying this decline as my trades show.
For FullyInformed USA Members, here are the latest Caterpillar Stock trades for 2015.
Caterpillar Stock – Trades For 2015 Update – Mar 21 2015
Disclaimer: There are risks involved in all investment strategies and investors can and do lose capital. Trade at your own risk. Stocks, options and investing are risky and can result in considerable losses. None of the strategies, stocks or information discussed and presented are financial or trading advice or recommendations. Everything presented and discussed are the author’s own trade ideas and opinions which the author may or may not enter into. The author assumes no liability for topics, ideas, errors, omissions, content and external links and trades done or not done. The author may or may not enter the trades mentioned. Some positions in mentioned stocks may already be held or are being adjusted.