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Is Caterpillar a Sell Despite 4Q Earnings Beat?

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    Is Caterpillar a Sell Despite 4Q Earnings Beat?

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Of Caterpillar digging innocent solid gains -- after topping earnings forecast in issuing a strong outlook for 2012 the news giving even more fuel.

To the stock's recent surge well above a hundred.

But Matt -- of Revere security says now.

Start getting out.

-- Kelly joins us for today's contrary -- called now welcome -- -- You just -- this stock chart the earnings report not only terrific earnings but the price was -- -- that you see the stock could fall to -- -- -- high -- why.

I do I think that a lot of or a part of Caterpillar's.

Great quarter as fact that accelerated depreciation ends in 2012.

Some major manufacturing companies are pushing.

As much as they can into this year to take advantage of that.

So I think you combine that -- the fact that the assumptions are for this soft landing in China.

Things -- -- well in Europe and things like that.

Which are not.

To me obvious -- And then on top of that kind of -- trading at a better multiple -- apple.

Well you last time we were here you what you advised to shorting of of lululemon -- you suggest that was going down.

That went up instead what did you get wrong -- that may give us an indication whether you're right on Caterpillar.

Lululemon and an 18% immediately after we talked about but overall it's up a little from there I don't know we can see the chart -- the three month chart -- -- -- -- -- 18% and in three days is a pretty good return we set -- up.

-- -- get out in time -- sort of with an option strategy that worked out really well and actually.

It went up short term then went back down immediately after as you can see on the chart.

And it wasn't until recently that the stocks -- to go up.

With the market I mean you know the market is so it's it's all timing timing timing certainly kind of tell every period giving us we Caterpillar -- I think they announce a quarter of the stock's gone up it's gone from.

The mid ninety's to a 111.

And in what quarters -- to make it go up.

Well emerging market growth.

Right I mean the globe is just exploding -- -- the populations all the economists tell us how we're seeing such increases in population and demand in.

I mean doesn't -- did does that carry play into your outlook at all you know.

I think that's a question and I think the idea that you know China is on this explosive growth track has not been quite -- out you know things of slowdown in China.

So I'm not so sure I'm not have a big subscriber to this emerging market mania.

Now financials have been on roll recently do you think that's that's another false expectation here that it'll continue.

My number one short ideas actually finance is major general or any -- will I would say the money center -- represented by the ETF the Axel I think that.

There are three major issues going on with financials that don't bode well for them.

On the first.

Is that with this you know fed keeping rates lower.

In the ideas that's gonna spur loan demand.

Hasn't so far as -- so far.

And with major money center banks.

They have very minimal exposure do -- -- C and I or commercial industrial loans.

So there -- major customers from big corporations.

They're finding and may be more cost effective go to the bond market so they're not gonna benefit there too.

What I would call protests populists -- it's been for the United States.

You know a very aggressive position by the White House against major banks and Wall Street -- So I'm not so sure going into the headwinds of a White House it's determined to go after these institutions is does that fantastic.

You know and and third.

-- everything's priced in for perfection as far as everything in Europe being resolved.

Again not necessarily great that -- made this bet at the end of October.

In the market collapsed and that's what I think to be happening again Mac -- -- securities' Matt good to see again.

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