According to @QCompounding, buying the S&P 500 at a 5.3x P/E in 1917 and selling at 34x in 1999 would have delivered an 11.6% annualized return, with only 2.3% per year coming from P/E multiple expansion, citing Terry Smith; source: @QCompounding. For traders, this decomposition indicates that most of the long-run return in that period came from earnings growth and reinvestment rather than valuation rerating, making fundamentals the primary driver of performance; source: @QCompounding. Positioning takeaway: prioritize earnings durability, reinvestment rate, and cash-return policies over hopes for late-cycle multiple expansion when sizing equity or index exposure; source: @QCompounding. For crypto-adjacent equities and tokenized equity products, the same finding cautions against relying solely on rerating without cash-flow support, highlighting the importance of fundamentals-based frameworks even in risk assets; source: @QCompounding.

According to @StockMarketNerd, sell-side narratives on Alphabet (GOOGL) flipped from “search is dying” at roughly $150 and about 16x forward EPS to “best name in Mag7” near $320 and around 30x forward EPS, underscoring pronounced multiple expansion, source: @StockMarketNerd. For crypto traders, rising mega-cap tech valuations have historically coincided with stronger equity-crypto co-movement; Bitcoin’s correlation with U.S. equities has increased notably since 2020, indicating higher spillover risk from tech-led risk appetite into BTC, source: International Monetary Fund (IMF, Adrian/Iyer/Qureshi, 2022).