Earnings vs. Profits & The Bull Market - End of the Rally, or Beginning of New Leg?

More importantly, since the bulk of the expected increase in earnings estimates are based on tax cuts/reforms, when it becomes apparent those legislative policies are not forthcoming, those estimates will be ratcheted lower. With the market trading well ahead of earnings growth currently, the risk of disappointment is extremely high.

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With corporate profits still at the same level as they were in 2011, there is little argument the market has gotten a bit ahead of itself. Sure, this time could be different, but it usually isn't. The detachment of the stock market from underlying profitability suggests the reward for investors is grossly outweighed by the risk.