Chart of the Day
- Current levels of capital investment by miners is at bubble-like levels
- If D&A represents an estimate of maintenance capital spending, current capital spending is heavily skewed toward increasing output
- Mature, cyclical industries (mining is among the most mature) do not support high levels of growth investment in the long-run
- Caterpillar has outperformed, with a millennium-start to date total return of 393% vs. 16.9% for the S&P 500
- Caterpillar’s success is heavily dependent on this explosion of investment by miners.
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