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Companies sitting on boatloads of cash
As many Covestor managers have mentioned in recent commentaries, U.S. corporations are near historic highs in profitability but broadly speaking are not investing those proceeds at a similar pace. On the WSJ's Real Time Economics blog, Phil Izzo presents a helpful graph of this dynamic, which is clearly one of the reasons why the U.S. jobs market remains so weak:
Josh Brown weighs in from an investor's perspective:
Profit margins are at almost disturbingly high levels but without some revenue growth and investment, it's meaningless. Multiples won't expand so long as growth looks like a fourth priority (behind profitability, liquidity and compensation).
Time to do something. Take some risk already, will ya? Jump!
Mick Weinstein on 18 Dec 2011
Article Tags: postcheck
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