Part 4/8:
For many, the argument that inflation or the fluctuating value of the dollar justifies these skyrocketing valuations does not hold water. If inflation were the primary factor, robust profit growth would logically follow, but that's not the case. For instance, while earnings per share for the S&P 500 have grown by a modest 18% since March 2023, stock prices leaped by 45%. This discrepancy raises alarms about the tendency to ascribe growth to irrational levels of investor sentiment rather than fundamental performance.