The volatility of profit margins |
Robert Gay | Fenwick Advisers| 14 January 2019 |
Figure 1 shows net profit margins for S&P 500 companies over the past five decades. I have used this in various presentations. The key message is that the cyclical volatility in earnings has increased dramatically since the 1980s. Recessions now bring very large swings in profit margins, even mild ones such as the one in 2001, despite the secular decline in inflation and its volatility.
S&P
500 Net Profit Margin |
Not yet a Member? It’s quick and free to join. Already a member? Please log in.
© 2019 Portfolio Construction Forum, Brillient Investment Publishing Pty Ltd ABN 19 122 531 337. All rights reserved.
Refer Terms & Conditions of Use.
Similar Articles