According to @QCompounding, citing Terry Smith, buying the S&P 500 at a PE of 5.3 in 1917 and selling at a PE of 34 in 1999 would have produced an 11.6% annualized return, with only 2.3% per year attributable to multiple expansion and the remainder driven by earnings and reinvestment (source: @QCompounding on X). For trading, the same source-backed attribution favors prioritizing durable earnings growth and reinvestment compounding over chasing valuation rerates; by extension, crypto participants can apply this framework by emphasizing fundamental adoption and cash flow analogs rather than relying on rerating alone (application based on @QCompounding citing Terry Smith).

According to @garyblack00, TSLA’s recent outperformance is due to multiple expansion, with the one year forward EPS multiple rising from 60x in Jan 2024 to 196x while 2026 and 2030 earnings revisions remain negative, including analysts’ Robotaxi and Optimus estimates. He adds that despite an expected 2026 to 2030 earnings growth rate of around 40 percent CAGR, the valuation is hard to justify at a 2026 PE of 196x and a forward PEG of 4.9x, according to @garyblack00. He also argues investors will eventually demand that TSLA earnings revisions turn positive, according to @garyblack00.