feels almost mean to drop my usual log scale, but it's out of love

It’s like saying trickle down economics works regardless of whether anything trickles down

It’s possible, and indeed we had a version of that for much of the postwar period, but doing it without a massive imbalance between profits on one side and household+government deficits on the other requires something simple but increasingly difficult: a balanced distribution of incremental wealth

... preloading - "what's a phase transition?"

On the subject of "alternative" valuation measures, note that this "valuation" measure matched current levels at the *beginning of the 2000-2002, and 2007-2009 market collapses, surging to higher, presumably "overvalued" levels at 2002, 2009, 2020 recession lows, and after the 2023 market plunge.

... which might be ok if the whole pie was growing rapidly. Unfortunately, average annual real U.S. GDP growth over the past 25 years has been the lowest in history.

AI investment is a short boost, but as in every "new era", excess profits eventually become consumer surplus.

You'll also notice that the valuation metric in the previous post peaks at market *bottoms*

Because margins do fluctuate.

That's why, in market cycles across history, valuations anchored to revenues and gross value-added are better correlated with long-term returns than even P/E ratios.