Merryn Somerset Webb

Everything is fine, unless earnings growth expectations are wrong.

Although I was also looking back.

I was looking back because, you know, you look at it and you think, well, is this like the end of the 60s?

Is this like the 70s?

Is it possible that, in fact, earnings growth was really great just before everything went wrong in the 1970s?

And guess what?

Yeah.

Yeah, here we are, rhyming away, rhyming away.

So the whole thing behind this time is different because record high earnings.

Same in the 1960s.

Coming into 1969, record high earnings.

Coming into 1970, earnings fell back.

Inflation starts to take off towards the end of the 1960s.

And then you move into this environment in the 1970s, where, by the way, earnings kept rising.

Yeah.

Earnings were tripled during the 1970s.

But the market as a whole, the US market, went absolutely nowhere in that whole decade.

So of course, you lost a big part of the money in real terms.

CARRIE NORDLUND, JR.

: So the earnings can't save you when sentiment turns and when inflation turns was kind of my point.