According to @QCompounding citing Terry Smith, buying the S&P 500 at a price to earnings of 5.3 and selling at 34 would have delivered about 11.6% annualized, with only roughly 2.3 percentage points from multiple expansion (source: @QCompounding). This decomposition indicates most long-term equity returns came from earnings growth and reinvestment rather than rerating (source: @QCompounding). For portfolio positioning, prioritize companies with durable earnings compounding, strong reinvestment, and high return on capital, and be cautious about relying on valuation multiple expansion for alpha (source: @QCompounding). For index exposure, expected returns will hinge more on forward earnings trajectories and capital allocation than on further rerating (source: @QCompounding). Near term, focus on earnings revisions, buybacks, and dividend growth as key total-return drivers rather than multiple swings (source: @QCompounding).