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Strategies & Market Trends : Gorilla and King Portfolio Candidates
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To: Wyätt Gwyön who wrote (44777)7/22/2001 1:41:04 PM
From: Mark L.   of 54805
 
Fine post!

What makes the numbers even worse is that corporate profits are currently (2000) 6% of GDP. This is at the very outside of the historical range. My belief is that politically we are not going to undergo a profound shift in sentiment and that, come the next serious recession (so far this one--if it's even a recession--is a walk in the park), populist sentiment will ensure legislation and policy to bring profit percentages more in line with historical norms. I note that during the last election, when times were still real good, one of the Presidential candidates was able to garner a majority of the popular vote with a platform which included significant curbs on drug-company profits.

Obviously, if corporate profits return to historical norms, then the assumptions behind 11% profit growth become even more outlandish.

Not directed to you, Mucho, but to other readers: Please note that I'm not predicting global economic collapse or depression. I'm not even predicting an end to the bull market. I'm just saying that the bull market, if it continues, will do so at a pace which is far more moderate than is generally assumed.

Directed to Mucho: Yes, I'm indebted to WEB for his beautifully cogent presentation of many of these ideas.
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