EBITDA

Record High Profit Margins Might Not Mean Revert

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Reading Time: 5 minutes S&P 500 profit margins are a pivotal topic to discuss when forecasting the overall market’s direction. It’s traditionally thought that margins are cyclical and mean reverting metrics. This means they go up and down. When they go up, it’s expected they will fall and when they go down, it’s expected…CONTINUE READING

Net Debt Is Increasing Faster Than EBITDA

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Reading Time: 5 minutes The drug Wall Street is addicted to is debt. Like a drug addict, Wall Street needs an intervention to solve this problem. Usually interventions occur in the form of a deleveraging which is caused by an increase in default rates and rate hikes by the Fed. Although the Fed delayed…CONTINUE READING

No Economic Stimulus, No Productivity Growth

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Reading Time: 4 minutes In the recent few weeks the reflation trade has unwound as the Russell 2000 is now negative for the year, the ten-year bond yield has plummeted to 2.2374%, and bank stocks have fallen about 9% since March 1st. To be clear, the Russell 2000 initially rallied after Trump’s election because…CONTINUE READING