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Has Caterpillar’s Stock Become Overvalued?

By John S. Tobey

Caterpillar’s stock is hitting new highs. That fact, by itself, is not worrisome. But what about its valuation? Is that getting too high? Certainly this comparison makes it look so: Price/estimated earnings ratios: 2011 – Caterpillar = 17.8x; DJIA = 12.6x 2012 – Caterpillar = 13.7x; DJIA = 11.3x So, should we avoid Caterpillar... »

Deflation – How It Can Exist Even As the Economy Recovers

By John S. Tobey

Deflation is being presented as a force that trips up the economy. The simple reasoning: As prices fall, consumers and businesses postpone buying, thereby causing prices to fall further. Hence, a downward-spiraling cycle. Like many of the negative forecasts we have read over the past months, this one is overly simplistic. It ignores two... »

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