James Montier Explains Why Corporate Profits Keep Going Up
Odd Lots
Bloomberg
4.4 • 1.6K Ratings
🗓️ 26 June 2023
⏱️ 45 minutes
🧾️ Download transcript
Summary
More than a decade ago, GMO strategist James Montier published a paper predicting that corporate profit margins were destined to come down from "nosebleed" levels. Fast forward to 2023, and it's clear that hasn't happened as profit margins remain far above their long-term average. On this episode of the Odd Lots podcast, Montier explains what he got wrong back in 2012, why corporate profits have remained so stubbornly high, and what this could mean for stock valuations now. He also discusses the ongoing debate over whether high corporate earnings are fueling inflation, as well as revisiting the work of economist Michael Kalecki.
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| 0:30.0 | This is Paul Swini, here to tell you about another podcast you should be listening to. |
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| 1:09.6 | Hello and welcome to another episode of The All Thoughts Podcast. I'm Tracy Alloway. |
| 1:14.0 | And I'm Joe Weisenthal. Joe, you know what's a hot topic at the moment? |
| 1:18.3 | Don't say AI. I mean, it is, right? But I guess it is. |
| 1:24.1 | Yeah. Okay. We're not talking about AI. We're talking about another hot button topic, |
| 1:28.9 | which is corporate profits. Yes. It might kind of be related. Valuations, stocks, |
| 1:35.0 | booming, profits, booming, etc. Like there might be some connection. |
| 1:40.1 | Right. Okay. That is fair. But one of the reasons everyone's talking about corporate profits at |
| 1:45.0 | the moment is because obviously there is this new idea that maybe there is profit-led inflation, |
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