The first point I make is that profit growth has been flat since ~2014 but the stock market has gone up quite a bit.
My question is: Why had the stock market continued to go up despite flat profits?
My question is: Why had the stock market continued to go up despite flat profits?
Why?
To use poker as an analogy: if you aren't sufficiently bankrolled, the correct play (most positive EV) can involve an unacceptably high risk of ruin. ....and BTW are you also factoring in the probability of fraud or a government seizure in your calculations?
When interest rates are low, firms can finance to buy back. Not only that, investors shift their investments to stocks, instead of bonds. Two forces are at work to pump stocks, both forces are products of low interest rates.
If true then that's pretty impressive and possibly much better than what the markets ~10 years ago expected?
Since 2014, Profit (before taxes) has been roughly $2.2 trillion every year.