The tendency of earnings estimates to fall

[Seth Ackerman]

	Doug Henwood wrote:

> U.S. corporate profitability peaked in late 96/early 97, and has been 
> flat-to-down since. It makes you wonder where the alleged 
> productivity boom is paying off.
.
But the corporate profit rate stabilized at a very high rate; it hasn't
plummeted. That does seem chonologically inconsistent with the New Economy
story, which holds that '96 was the early days of a tech-driven productivity
revolution. But it's not inconsistent with the 1996-2000 bull market in
stocks: As long as you have a sustained high rate of return on invested
capital, you should see a high rate of return on stocks, no? You don't need
a constantly rising rate of profit.

Seth