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jungsk90 5 posts  |  Last Activity: Jun 29, 2014 12:27 PM Member since: Feb 11, 2009
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  • jungsk90 jungsk90 Jun 29, 2014 12:27 PM Flag

    Thank you for taking the time to explain this to me. This does take away CAT's debt. However, I remain bearish in CAT due to what is happening in China. China's growth is slowing down...and I feel like this slower growth is really affecting CAT in a negative way. I also feel like China is at the Brink of a Housing Market Crash...and that would not just be bad for CAT...but for the rest of the world as well...

  • jungsk90 jungsk90 Jun 28, 2014 1:42 AM Flag

    Yes, it's my first comments on the CAT message board. But no need to get too feisty there. I'm not trying to offend anyone here. Just here to share my thoughts and get some feedback in the process.

    I have to admit that you are right, they did borrow at 1-2% rates once....in the past. Some of those notes were due earlier this year and the rest of these super low rate notes will be due next year. The rest are at 3-4%. And the new notes issued recently to replace the old ones were also at 3-4+%. Right now any company borrowing money can get a low interest rate. Not just CAT. CAT is doing a smart thing by selling more notes at this time. They should sell as much as they can at this time. And the 50 year 4.75% notes they are selling is pretty smart in my opinion.

  • jungsk90 jungsk90 Jun 27, 2014 4:00 PM Flag

    I agree with both you and Peter Schiff in regards to the cold weather explanation. Because as Peter Schiff was explaining things...the luxury good companies actually exceeded expectations during this cold period...and he argument against the cold weather excuse...that the rich could get around in the snow...while the middle class couldn't?...and it just didn't make any sense then...and it doesn't now...the cold weather was not the cause of the economic problems in Q1.

  • jungsk90 jungsk90 Jun 27, 2014 3:55 PM Flag

    Yes, these stock prices are not all due to fundamentals any longer...due to QE...and yes...I agree that i's pretty foolish to buy back shares at/near all time highs by borrowing money...I mean...it's like all that the executives care about is the Share price. And not really what is the best for the company. I mean I would think the executives would do what is the best for the company right?...and the share price will follow. Maybe I'm just a little too naïve about how things really work. As you can tell, I'm pretty pessimistic about CAT and also about our general economy and markets as well. And as to the surge in the stock market these last few years...I have heard it before...it's different this time...and we all know what eventually happens...

  • jungsk90 jungsk90 Jun 27, 2014 11:04 AM Flag

    I couldn't agree with you more. I can't believe how well CAT's stock price has held up and even increased with their decreased revenues and profits... When I loot at CAT, I see a big company that needs to sell heavy equipment to maintain and grow earnings...kind of like a car manufacturer...and with such high overhead...when a down turn in the economy comes I would think that CAT's revenues and profits would like fall off a cliff...but my point here is that CAT has this huge debt on it's balance sheet...and I wonder how much money they spend financing it every year...I mean even if it's a low interest rate...it must be immense...and they are issuing more bonds ! They are taking on more debt...not paying down their debt...unless they are replacing their current higher interest debt with lower interest debt...but either way...the debt is not decreasing...as CAT's management has said somewhere that their plan was not to increase the amount of cash they has on hand...and Why are they issuing more bonds you ask? So that they can buy back more shares...and continue to grow their stock prices and increase their dividends. And when you look at how much cash CAT has...or I should rather say...how little cash CAT has in it's balance sheet...relative to it's market cap and it's debt...to me, it looks like CAT could go under in a sudden and unexpected decrease in sales...

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