To judge by recent headlines, you might imagine that Wall Streeters are unlocking their windows and preparing to step out on the ledges while Americans line up for soup and hardtack on the sidewalks below. (Never mind that -- as pointed out in the latest issue of Stock Advisor -- the S&P 500 index has already returned more than its historical average over the past 12 months.) I suppose you can't blame the media. After all, in "journalism," if it bleeds it leads. And the closest thing to blood in investing is the earnings warning.

So while fashionable pundits have been predicting stock-market doom-based downgrades and misses from the likes of Wal-Mart (NYSE:WMT), Intel (NASDAQ:INTC), and Cisco Systems (NASDAQ:CSCO), construction and agricultural bellwethers such as Deere (NYSE:DE) and Caterpillar (NYSE:CAT) have put up record years, sometimes trouncing expectations, other times missing by a hair. Yesterday, Caterpillar's brass announced yet another increase in expected revenues, heralding the jackpot in a most suitable locale, Las Vegas.

Apparently, the people who produce minor little things like roads, bridges, and buildings aren't so concerned with the worries of the economic girlie-men. They can't get enough heavy equipment. Chair and CEO Jim Owens said his firm is experiencing unprecedented demand. That should put sales up 25-30% over last year's $22.8 billion. Earnings are expected to be 80-85% over 2003's $3.13 per share. The hypothetical $5.85 per stub would put the firm at a forward PE around 13 today. That looks OK given the growth the company expects, but it's not much of a margin of safety for strict value investors. Dividend fans may find the 2% yield appealing, but worshippers of free cash flow will likely be troubled by the firm's years of negativity on that front.

In the end, a bet on Caterpillar today is still a bet on the economy. A double since two years ago, the easy money has been made. A cyclical heavy industry like this one depends on faith in underlying spending. So while today's good news bodes well for both the economy and the company, investors need to stay alert and make sure that they, and Caterpillar, are not underfoot when the next shoe drops.

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Seth Jayson digs the heavy machinery, but at the time of publication, he had positions in no company mentioned. View his stock holdings and Fool profile here. Fool rules are here.