Profits - a sign of caution for the market

 

Profits after tax as a percent of GDP is at extreme levels. Is it bad for stocks? Three implications.

1. The high level of the ratio suggests the market is likely to appreciate at slow pace.

2. The time to worry is when profits after tax peak.

3. The market should be ok as long as profits rise.

Stay tuned.

George Dagnino, PhDEditor, The Peter Dag Portfolio
Since 1977
Author, Profiting in Bull and Bear Markets

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