if you remember, a year ago there was a lot of talk about, that DovJones needs to fall by 1k.
the idea was supported by the dynamics of corporate profits (besides waves and other predictions).
if you look at the corporate profits of companies from S&P 500 (EPs), then it will turn out,
that profits fell to zero, then grew back at a frantic pace (which also confused some).
the dynamics of EPs used by Schiller year-on-year looks like this.
падение на 100% with subsequent restoration (what created such a growth rate).
might seem, that this time is different and we really have a disaster,
however, the scale of the fall created the financial sector (which was previously
less public – investment banks were partnerships),
therefore, the financial traded sector has never had such write-offs..
excluding financial sector from EPs, no drama is visible.
(numbers forecast for 2011 from S itself&P)
you can add – and the weight of the financial sector in the indices was also,
at a historically extremely high level. in fact, это не имеет значения.
EPs – is the sum of the earnings per share of all the companies that make up the index.
ie. profits are not weighted by capitalization, from what, for example, he was very indignant
Jeremy Siegel And .
I also want to add a comparison of real and nominal growth rates of corporate profits.
in fact, corporate profits are very volatile, therefore, the difference in inflation in different
historical periods are almost invisible.
