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Thursday, October 23, 2014

CAT got Chanos' tongue?


Jim Chanos has been trumpeting his short on Caterpillar for a year. Blah blah blah. And for more than a year, we have been hearing that mining is in a slowdown, blah, blah, blah; and that China is in  a slowdown, blah, blah, blah, and that CAT will make just $3.50 a year, blah, blah, blah, and that North America is just 15% of CAT's business, blah, blah, blah.

Now Chanos (yes I know it rhymes with Uranus) is founder of Kynikos Associates. And he chose the name because kynikos as it is the Greek term for cynic.

Today CAT reported blowout earnings. The stock was up 5 to 100.  A cynical sort, could say that Chanos was missing his gnosis on CAT!

Meanwhile,  CAT, bought back $4.5 billion in stock, and indicated that they would earn $6 this year, over 70% above Mr. Cynic's estimates!

And the stock goes higher!

While Chanos' short P&L goes lower!

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