I listed the over under on the   "reflation" trade yesterday as "2 days". So it was the under. The thesis is back after a very short vacation.

One way to the play the mining thesis are the 2 major equipment suppliers - Joy Global (JOYG) and Bucryus (BUCY); we've written about both extensively. I was not quite a fan of this group by last summer since steel prices had rocketed (as had all commodities) which made the cost to produce their equipment high (thus pinching margins) (May 29: Joy Global with Solid Results - But I'm Not as Bullish as Everyone Else)(May 14: Deere Earnings - Why I'm Avoiding Equipment Stocks) (May 17: WSJ - Fast Rising Steel Prices Set Back Big Projects) but now of course most commodities (despite a surge the past 6 weeks) are still much lower than peak 2008 pricing. Joy Global is slanted more to the coal market while Bucyrus is more of a broad exposure but like all things in the market nowadays they (a) trade together and (b) trade with oil almost 1:1. Joy Global instituted a massive share buyback program last year (Sep 11, 2008: Joy Global to Buyback 1/5th of Shares this Year - 2/5ths by 2011) - the question was would they have the free cash flow to come through. There are no worries anymore about such things - all we know is when oil is up, HAL9000 buys everything in the commodity / global growth universe. We must follow as slaves to the computers.

We have owned these names on and off over the years, last time around we bought Joy Global in mid November under $15, and within 6 days it jumped to over $22, so we quickly jumped out. Those were the days! When every trade worked out ;) But we're adjusting now - ignore everything and buy commodities and tech on every dip - they exist in a parallel universe of green shoots. The market has been shouting and I finally got it.

The stock was range bound for many months, and made another return to $15 at the March lows. But now...