As the equity bull market has entered its ninth year, market participants have voiced concerns over elevated valuation levels. John Hussman has been one of the more prominent who have sounded the warning bells about low expected returns and elevated risks embedded in equity valuations. In his recent note, Hussman stated that few investors recognize that one of the reasons why valuation multiples were so rich in 2000 is that profit margins were actually below historical norms at the time. The benefit of normalizing the embedded profit margin comes not just from muting margins that are above historical norms, but also from normalizing margins in periods where they are below historical norms.