Brookfield Corporation: Still One Of My Favorite Compounders For The Next Decade

2026-02-15 23:12:00 ET

There is a chart that is a little troubling about the market right now. It is the forward P/E of the S&P 500 ( SPY ) and the returns for the next 10 years, and this chart shows that there is a certain correlation between the two. And after 20x, historically, the return for the next 10 years is much closer to low single digits per year. This is not an absolute truth, as it depends on several factors, such as the actual growth of companies in the future, the composition of the S&P 500 at the time, and so on. But in any case, it is enough to say that when expectations are high and indexes are expensive, returns are generally compressed....

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