Corporate Profits as a Percentage of GDP Hits All-Time High

Interesting bit of big picture perspective here from Mark Thoma’s blog.  The chart shows after tax corporate profits as a percentage of GDP.

Depending on your perspective you might be inclined to come to extremely different conclusions about this situation:

• Some might be inclined to believe that this means the stock market is extremely undervalued.  
• Some others might be inclined to believe that this is an entirely unstable and unsustainable environment that is likely ripe for a bit of mean reversion which would bring us back down to something closer to the 6-7% range.

What do you think?

Please follow and like us:

About Post Author

Cullen Roche

Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds. Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances. He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.

See author's posts