The economy has recovered, but over 25% of Russell 2000 firms don’t make money. This is while the Russell 2000 is at its record high and up 12.18% year to date. The Russell 2000 has been helped by the strong dollar and the improving economy, but many firms are poor operators.
To get in the S&P 500, a firm needs 4 straight quarters of as reported profits. This explains why Tesla isn’t in the index even though it is one of the biggest auto makers in the country. It’s also important to recognize the cyclicality of this chart of non-earners. When the rate has been this high since 1985, the economy has been either in a recession or close to one.
Submitted August 23, 2018 at 12:07AM by AlexPitti https://ift.tt/2PxfzOx
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