Part 4/10:
Earnings Growth: U.S. companies are generating higher inflation-adjusted earnings than ever before. For instance, S&P 500 companies earned about $50 per share three decades ago, while this figure has surged past $200 today.
Valuation Multiples: The Schiller PE ratio has reached levels not seen since the dot-com bubble burst. Investors are willing to pay premium prices for shares due to their confidence in U.S. companies’ profitability.
Technology and Innovation: The current market landscape is heavily influenced by technology giants that have substantially disrupted markets, which has led to significant cash flow and earnings for these companies. The rise of automation and the cloud computing sector has only multiplied this effect.