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Strategies & Market Trends : Buffettology -- Ignore unavailable to you. Want to Upgrade?

To: Ryan Hess who wrote (2711)	12/20/2000 9:01:39 PM
From: Moominoid	Respond to of 4690

So we could have a corporate recession where profits are squeezed but jobs not? One of my problems with recent stock-market valuations and analysts projections is that they assume to high a rate of profit growth into the future. If the eocnomy grows nominally at say 5%, earnings can't be increasing indefinitely at 10% or soon profits will be the majority of the GDP. So some correction from the recent increase in the share of GDP going to profits is likely but it seems cutting jobs is normally the first response to a profits squeeze. Generally in recessions unemployment rises AND the share of the share GDP going to labor rises. Profits are much more cyclical. David