What Record Corporate Profit Margins Imply For Future Profitability and The Stock Market

By GREENBACKD

Corporate profit margins are presently 70 percent above the historical mean going back to 1947, as I’ve discussed earlier (see, for example, Warren Buffett, Jeremy Grantham, and John Hussman on Profit, GDP and Competition). John Hussman attributes it to the record negative low in combined household and government savings:

The deficit of one sector must emerge as the surplus of another sector. Corporations benefit from deficit spending despite wages at record lows as a share of economy.

Einhorn Tells Investors: Tesla Is Gaming S&P 500 Index Committee

david einhorn, reading, valuewalk, internet, investment research, Greenlight Capital, hedge funds, Greenlight Masters, famous hedge fund owners, big value investors, websites, books, reading financials, investment analysis, shortselling, investment conferences, shorting, short biasThe Federal Reserve has poured unprecedented levels of stimulus into the U.S. economy to deal with the pandemic, and most experts agree that inflation is just around the corner. David Einhorn has positioned his Greenlight Capital to benefit from inflation when it arrives. Q2 2020 hedge fund letters, conferences and more SORRY! This content is Read More


John Hussman spoke recently at the 2013 Wine Country conference. Here he describes the relationship between corporate profits, and government, and household savings (starting at 22.08):

Hussman’s whole talk is well worth hearing.

Order Quantitative Value from Wiley FinanceAmazon, or Barnes and Noble.

Click here if you’d like to read more on Quantitative Value, or connect with me on LinkedIn.

h/t Meb Faber