[timlangeman]

One of my main points is that you need to look beyond earnings per share to see the bigger trend.

What slide/s would you use from the JP Morgan Guide that is better than the St. Louis Fed chart I featured?

  * https://fred.stlouisfed.org/graph/?g=qx3r

The Chart on Page 7 looks fantastic but it is earnings per share, not total profits before taxes.

The question I would ask is why the stock market graph looks so different than the St. Louis "Corporate profits before tax" graph?

My hypothesis is that many of these companies borrowed a lot of money in the bond market to buy back their shares and thereby juice their earnings per share.

[CapriciousCptl]

I don't understand the point you're making. Stagnant corporate profits can happen for a lot of good reasons, particularly when there's GDP growth over the same period. Increased labor pay, increased competition, cheaper and higher quality products for consumers, long-term minded growth at the expense of short-term profit taking, etc.

Profit also involves some major accounting nuances. In SAAS, for instance, advertising costs resulting in customer acquisitions are generally accounted for upfront, reducing accounting profits in the period of acquisition. This is opposed to other industries, where investments are more easily capitalized and then charged over their useful life.