Bill Miller, Chief Investment Officer
Throughout this year, we have been in the camp that profit margins would not mean-revert. Better measures of labor and manufacturing productivity, technology improvements and cheaper imports have all helped profits. As the chart below shows, that was the case in the third quarter. In 2014, we expect margins to remain persistently high.
The big three—productivity, technology and cheap imports—should help again next year. Plus, we do not see excesses in business investment, inventory or debt (personal or commercial) in 2014.
Persistently high profit margins should help equities in 2014.
The views expressed above are those of Brinker Capital and are not intended as investment advice.