On profit growth.

• Author: Rees, Matthew
• Position: U.S. Economy - Brief article

"The price-to-earnings multiple on the S&P 500, using the past year's earnings, comes to 17.7. At its peak during the 1990s tech bubble, it was over 30. But the things that are boosting earnings now--overseas strength, dollar weakness, and share buybacks, as well as elevated profit margins--tend to be highly cyclical. If the business cycle finally does catch up to them, stocks might not seem like steals."

"To help smooth out cyclical swings, Yale University professor Robert Shiller compares stocks to their average annual earnings over the past ten...