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by throw8383833jj
1486 days ago
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Look at it this way. In the forever long term, stock valuation (without dividends) can't exceed the GDP growth curve. Otherwise the warren buffet ratio would be meaningless. So what is GDP growth? It's population growth plus productivity growth. everything else just is just productivity growth. Sure, stocks can increase their earnings as a larger percentage of gdp, but that is also finite and will in the long term still fit the GDP growth curve. So if Pop growth and productivity growth are 0 in the long term (it might be higher i don't know), GDP is Inflation. if GDP is inflation then equity returns without dividends is inflation as well. |
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