“high horsepower” economic indicator

Published by: Warrick Vaughan | Date: August 14, 2014

Cummins (CMI) is the world’s largest independent maker of
diesel engines, the kind that power trucks, cranes, mining equipment and electrical generators.
This makes its share price rise and fall with the pace of global economic activity.
Today (13/08/14) however, there’s no crisis at Cummins. The stock has climbed
72% in the past 25 months. Since hitting another all-time high 10 weeks ago
the price has dropped 12% (The chart clearly shows this seems to be in rhythm with the current upwards trend)
This tells me that globally businesses are worried but still doing lots of driving, digging & lifting… which means
now is not the time to let fear take control.
Take a step back, see things the way they really are & then manage the risk.
Regards, Warrick
(I do not own CMI stock nor do I recommend relying on only one indicator)