Stocks may look reasonably priced based on a simple P/E, writes James Montier, but this is...

|By:, SA News Editor

Stocks may look reasonably priced based on a simple P/E, writes James Montier, but this is distorted by profit margins that are the highest ever. Not only that, but analysts' forecasts are for margins to rise even higher! A believer in mean reversion, Montier expects barely positive returns over the next seven years if profit margins move just partway back to their long-term average.