Profits Booming, Busting Like Never Before: Bernstein


Volatility in US corporate profits is at an all-time high now and they most-closely fit the definition of boom and bust, Richard Bernstein, CEO of Richard Bernstein Capital Management, told CNBC Monday.

Corporate profits are the most important metric to look at as an equity investor and in the US "they are booming and busting like they never have been in history," Bernstein said.

Looking all the way back to the 1930s, the amplitude between profit highs and lows is unprecedented, he added.

Video: Volatility in corporate profits is at an all-time high, says Richard Bernstein, CEO of Richard Bernstein Capital Management.

In the overall economy, the government isn't making structural changes that could dramatically change the economy, but is providing a "cyclical wind behind the economy," Bernstein said.

To make structural changes the government would need to shrink the financial sector in the United States -- to reduce unproductive interbank lending -- and lower the cost of capital by offering investment tax credits for investment in the 50 states, he said.

Gold Closest to a Bubble

If he had to call a bubble right now, Bernstein said it would be "gold, by far."

And while gold prices could continue to rise as money from newly-created gold funds pours in, it isn't a diversifying investment anymore, he said.

With gold you're "really just playing global growth as you are with emerging markets or commodities or anything else," he said.