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.

According to @QCompounding, traders should target companies where EPS is growing while valuation multiples are expanding, capturing both fundamental earnings growth and valuation re-rating as dual return drivers. Source: @QCompounding on Twitter, Jan 5, 2026. Implementation focuses on screening for positive EPS estimate revisions and increases in forward P/E or EV/EBIT multiples relative to sector benchmarks. Source: Investopedia definitions of EPS and valuation multiples.

According to @charliebilello, the S&P 500 P/E ratio has risen to 26, which is 31% above the 1989-onward average of 19.8, marking a third consecutive year of multiple expansion; the figure uses trailing 12‑month operating EPS with Q4 EPS estimated. Source: @charliebilello on X https://twitter.com/charliebilello/status/1996982319110914402 For trading, the reliance on estimated Q4 operating EPS puts focus on upcoming earnings updates and revisions that could shift the index’s multiple trajectory. Source: @charliebilello on X https://twitter.com/charliebilello/status/1996982319110914402 Crypto angle: shifts in US equity risk appetite can spill over to digital assets, and research shows BTC and stocks have exhibited higher correlation since 2020, heightening cross-asset sensitivity. Source: International Monetary Fund, Crypto Prices Move More in Sync with Stocks, Jan 2022 https://www.imf.org/en/Blogs/Articles/2022/01/11/crypto-prices-move-more-in-sync-with-stocks-posing-new-risks

According to Brad Freeman (@StockMarketNerd), the key to sustained trading success lies in identifying high-quality companies, consistently reassessing their fundamentals, trimming positions during excessive multiple expansion, and adding during multiple contraction. Freeman emphasizes the importance of remaining mostly invested while avoiding reactionary decisions to daily market headlines (source: Twitter, May 21, 2025). This disciplined approach aligns with crypto market best practices, where strategic portfolio adjustments based on valuation cycles are critical for maximizing returns and minimizing drawdowns.