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Valuation

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Valuation is the primary driver of long-term return

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S&P 500 Drawdowns (%) since 1979

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U.S. Growth Price/Sales Since 1971

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Value's discount widened to TMT-like proportions since 1971

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Tail Event: Private Equity Has A Massive Left Tail

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Profit Margin of the S&P 500 since 1957

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Yen Spot Price / Fair Value Relative To Long-Term Average Since 1969

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Shiller P/E Remains Above All But 1929, 2000, 2021 Peaks Since 1881

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S&P 500 equity risk premium (ERP), 1926-2023

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Small Cap Relative Valuations Have Become Attractive Since 1976

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