In early February, I was fortunate to attend IMCA’s annual consultants conference and hear Richard Bernstein talk about last year’s collapse in the price of energy. It was a bubble very few observers saw coming.

Indeed, some of the smartest investors on the planet, names like Buffett, Soros and Tepper, got caught flat-footed and waited until the fourth quarter to dump their energy stocks. So when one reads that folks like Nobel laureate Robert Shiller and Soros are considering dumping U.S. stocks, it’s a reminder that no one is right all the time.

Alarmists and others are fond of citing Shiller’s cyclically adjusted price-to-earnings (CAPE) as a signal that U.S. stocks are in bubble territory. The problem with their argument is that when one averages P/E ratios over the last decade, the figure includes two of the worst years for profits in modern history. When the years 2008 and 2009 are removed from the calculation, equities don’t look absurdly expensive.

That said, they are hardly cheap by any measure. Furthermore, corporate profits, as a percentage of nominal GDP, were at a historical high before the Great Recession. Since then, they have gone into orbit, topping 12% by late last year, according to Ed Yardeni. So the sustainability of the current U.S. bull market may be more directly linked to the persistence of record levels of corporate profits as much as any other single factor.

Research Affiliates’ Rob Arnott, the subject of last month’s cover story, recently voiced skepticism about whether businesses could continue to squeeze workers with anemic raises while continuing to enjoy their string of record profits. Though he is a libertarian, Arnott recently told Bloomberg News that corporations might face “peasants with pitchforks” if managements believed the current balance of power between labor and business was sustainable.

While the U.S. employment picture certainly is improving to a level where workers are starting to expect meaningful raises after five years, the likelihood of a sea change that puts labor back in the driver’s seat for the first time in decades seems far-fetched. So it’s not clear that record levels of corporate profit margins are the next bubble.

What is obvious is that changing demographics—a subject Arnott is certain to address at Financial Advisor’s Retirement Symposium on April 2—mean the next generation of retirees will face a different experience than the last. Preceding Arnott as a keynote speaker on April 1 will be Nick Murray. For a sneak preview of his thoughts on what may drive retirement in the 21st century, read the interview on page 96. For the real story, go see Nick and Rob in Las Vegas.