JOY Global.

Joy dec 12 2012joy dec 14 2012 s

JOY is in the business of supplying above and below ground mining machinery. It is comparable to companies like Finning, Cummings, Cat. etc. etc. It did quite well the most recent quarter but it also “guided” down for what is coming next, citing oversupply in the mining industry. The stock, together with the others mentioned,  has done extraordinarily well due to the commodities bubble that we have had or are having. Another factor that may have played a role is that as of today, precisely in fact, we have had 4 full years of interest rates essentially at zero. On top of that 100% accelerated depreciation for corporate tax purposes makes buying capital equipment relatively very attractive, more so than hiring labor. Other than in such wonderful places as the Congo, more machines and less people are used than ever before. (This is economic phenomenon that every first year economist is aware of, except , it seems, the Fed.) This all caused the euphoria that pushed this stock into a Mnt. Everest high of $100+ in what is clearly a B-wave. So far the stock has only lost 50% or so. More will come.

Below is Finning for comparison purposes;

ftt dec 14 2012