Analytics

 Investment Office

Selecting relevant market observations

Investment Thoughts
Macro Observations
Capital Markets
Markets in History
Beyond Finance
Quotes on the Fly
Chart Gallery
Academia
Coffee Chronicles
Archives
Asset Management
Pension Funds
Family Offices
Wealth Managers
Asset Managers
About
Disclaimer
Privacy Policy
Cookie Policy

   Investment Thoughts - Chart Gallery

U.S. Corporate Profit Margins – Highest Ever!
An interesting chart from GMO, and a strong case on the driving force behind these margin expansions

 

 

U.S. Corporate Profit Margins - Highest Ever !

 

 

 

Source: NIPA, Flow of Funds, GMO

As of 9/30/2011

 


What Goes Up Must Come Down!

 

"Today I find myself once again digging through this toolkit, searching for a way to understand the development of profit margins.  Currently, U.S. profit margins are at record highs according to the NIPA data. More freakish still is that these record high profit margins are coming during the weakest economic recovery in post-war history."

 

(...)

 

"When we look at the drivers of today’s high profit margins, we find fiscal deficits behind the high profit margins of many countries.  There is nothing “wrong” with this per se, but it does suggest that moves toward fiscal retrenchment will bring margins back toward more normal levels.  It seems unlikely that “this time is different” when it comes to mean reversion in margins: what goes up must come down."

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

What Goes Up Must Come Down! - GMO White Paper, March 2012-James Montier

01.04.2012


 

Themes

 

Asia

Bonds

Bubbles and Crashes

Business Cycles
Central Banks

China

Commodities
Contrarian

Corporates

Creative Destruction
Credit Crunch

Currencies

Current Account

Deflation
Depression 

Equity
Europe
Financial Crisis
Fiscal Policy

Germany

Gloom and Doom
Gold

Government Debt

Historical Patterns

Household Debt
Inflation

Interest Rates

Japan

Market Timing

Misperceptions

Monetary Policy
Oil
Panics
Permabears
PIIGS
Predictions

Productivity
Real Estate

Seasonality

Sovereign Bonds
Systemic Risk

Switzerland

Tail Risk

Technology

Tipping Point
Trade Balance

U.S.A.
Uncertainty

Valuations

Yield