Proceed with caution

Stock prices look frothy. If corporate profits get wobbly, look out below.

Stock prices have gone gangbusters. The S&P 500 index of big American companies has risen 40% in the last two years. But corporate profits haven’t kept up. In fact, they’ve fallen. The index’s earnings per share has dropped 2% in that time. That bifurcation has some investors worried that the market is in a bubble. So, have investors overvalued the stoc…