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The week's question
In March 2025, in the thread "Re: OT, out", Umm asked the members: "Do you think it is because America is made up of magical soil that makes businesses based in America magically profitable?" This week it is put to everyone again. The button below opens the small thread re-asking it - read what others have said so far, then give your own answer as an ordinary reply.
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Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A)
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Author: Said ✧  😊 😞
Number: of 22354 
Subject: Re: Latest from Howard Marks
Date: 01/09/25 11:30 AM
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No. of Recommendations: 3
the average US trend real earnings yield .... Today's S&P 500 valuation level corresponds to being 45% more expensive than any one of those averages

How much is a $ of earnings worth now, how much was it worth then? Lower interest rates justify higher stock multiples than higher interest rates. Until not too long ago we had historically low interest rates, justifying comparatively high multiples. Only right now valuations look high when taking this all-important factor into account.

As comparisons that do not take that into account is like "comparing apples with pears" (the original German saying for your "comparing apples with oranges"): Shouldn't comparing "today" with "then" limit the "then" to years with comparable interest rates?
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This community has written 21,861 posts about Berkshire Hathaway. The article-length ones it recommended most:
BRK: Why Not XOM? · 62 recs · 2024
Second quarter comments · 60 recs · 2023
Berkshire's Profit Contributors · 58 recs · 2023
Summary of 2Q 2026 · 55 recs · 2026
3Q Summary · 53 recs · 2024
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