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Passive is Eating the Market (EP.347)

Animal Spirits Podcast

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The Relationship Between Earnings Growth and Market Valuations

This chapter analyzes the relationship between earnings growth and market valuations. It discusses a chart showing the S&P 500 plotted against earnings since 1945, highlighting the close correlation between valuations and earnings. The chapter emphasizes that while valuations matter at extremes, earnings growth is the fundamental factor driving the stock market's rise.

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