Mohammed

S&P 500 returns since 2009: 2009: 🟢 +22.57% 2010: 🟢 +13.24% 2011: 🟢 +0.97% 2012: 🟢 +14.23% 2013: 🟢 +29.08% 2014: 🟢 +14.69% 2015: 🟢 +1.40% 2016: 🟢 +13.67% 2017: 🟢 +20.80% 2018: 🔴 -5.18% 2019: 🟢 +31.32% 2020: 🟢 +17.40% 2021: 🟢 +30.63% 2022: 🔴 -18.63% 2023: 🟢 +26.79% 2024: 🟢 +25.73% 2025: 🟢 +18.14% 2026: 🟢 +4.98% Can we really expect this level of growth over the next 17 years?

Can the S&P 500 compound at 10 percent annualized for another 17 years? Mostly an arithmetic question, and the arithmetic says probably not. Half of that 17-year run came from things the next 17 won't get for free. Multiple expansion off post-GFC trough valuations added 2 to 3 percentage points a year. Margin expansion from globalization, low labor costs, and the TCJA tax cut added another point. Buybacks compounded on top, funded by historically cheap debt. None of those tailwinds repeat from here. What you can still get for free: a 1.1 percent dividend yield (a 50-year low driven by buyback substitution) and nominal earnings growth in the mid-single digits. The starting Shiller P/E is near 40, a reading exceeded only at the dot-com peak. From that level the historical record is mean reversion drag, not a tailwind. Forward 10 to 15 year academic estimates cluster around 5 to 7 percent nominal, with the CAPE regression closer to 2 percent real. Repeating 10 percent annualized over the next 17 years has never been delivered from this starting valuation in U.S. equity history. Practical for my book: I don't size positions against an assumed 10 percent market return. I size against a mid-single-digit index baseline, with alpha coming from holdings where the bottom-up math has to beat that baseline by a meaningful margin, name by name. The chart only repeats if the regime does. Reading the math, not the chart.

Predict what Jerome Powell says tomorrow using just 1 word

Elon Musk arrives for trail. This is going to be absolute cinema. Look at his face as he walks in. 🤯