But there’s something insidious going on underneath the valuation equation and that is: Investors see paying higher and higher forward multiples not realizing that they do. Why? Because corporate profits are actually not expanding. Not only are they not expanding they’re shrinking on an aggregate level.
What if I told you corporate profits before taxes actually peaked in 2014, 5 years ago? Really, it is true:
https://northmantrader.com/2019/08/09/risk-2/profit-markets/
