Corporate Profit Margins are Abnormally High
Corporate profits have commanded this large a share of national income only twice before: in 1929 and 2006. Those years preceded the past century's worst two financial collapses.Corporate profit margins are strongly mean-reverting. What's your first instinct when you hear about a really profitable business? "I should do that, too." That's capitalism. Competition enters the market and drives down profit margins.
No comments:
Post a Comment