Largely due to multiple expansion. So you’re betting on the 30 PE expanding to 40, and so on. AAPL had a PE of around 10 a few times in the 2010s, so 300% of t

Largely due to multiple expansion. So you’re betting on the 30 PE expanding to 40, and so on. AAPL had a PE of around 10 a few times in the 2010s, so 300% of the return since then has been multiple expansion, rather than earnings growth. Returns from multiple expansion are obviously limited the higher the multiple gets. 3% return/year is the implied return if the multiple and earnings stay the same in perpetuity. The multiple can also just as easily go down, keep in mind. Historically, elevated valuation multiples regress to the mean, even if it takes years to do so