The reality is that the business cycle is different than the economic cycle — GDP growth is much more consistent than EPS growth. EPS declines can occur during periods of economic growth. Across the 68 years since 1950, earnings declined during 23 of those years despite positive economic growth throughout all of those years…34%! Real GDP growth (excluding inflation) has lagged the historical 3% average thus far in the 2000s and ’10s. But even if the economy looks solid for the next few years, history highlights that EPS is not immune to decline–especially from such currently high profit margins.