Quote of the Day
“There will always be bull markets followed by bear markets followed by bull markets.” – John Templeton With second-quarter earnings largely in the books (95% of S&P 500 companies have reported for Q2 2010), today’s chart provides some long-term perspective to the current earnings environment by focusing on 12-month, as reported S&P 500 earnings. Today’s chart illustrates how earnings declined over 92% from its Q3 2007 peak to Q1 2009 low which brought inflation-adjusted earnings to near Great Depression lows. Since its Q1 2009 low, S&P 500 earnings have surged (up over 800%) and currently come in at a level that occurred at the peak of the dot-com bubble. It is interesting to note that the original run-up in real earnings from Great Depression lows to dot-com highs took over 67 years. The current spike has taken 13 months.

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