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Even if it was 10x US GDP and it was only US stocks, there wouldn't be an obvious reason why that's a problem. The GDP measures yearly output. Why is it concern
by niknoble 5y ago
Even if it was 10x US GDP and it was only US stocks, there wouldn't be an obvious reason why that's a problem. The GDP measures yearly output. Why is it concerning for the stock market to be priced at 10 years of output?
- Jensson 5y agoThe stock market valuation is essentially how much money will trickle up to the owners in the future. If owners expects to extract 10 years of productivity then that is a huge red flag, basically means that working isn't valued and instead all the value goes to the asset owners instead of the workers. So you can see the valuation multiple as the tax workers pays to asset owners, high taxes are bad for the economy.