The Speed

The speed is one of the most important factors in development of any dynamic system. It is shown that since the end of the 19-th up to the middle of the 20-th centuries the average growth rate of earnings, dividends and S&P 500 index was 1.5% per year. In the second half of the 20-th century the average growth rate of dividend speed up to 5%, earnings up to 5.5% and S&P 500 up to 8% per year. The arisen divergence in the growth rate of earnings and S&P500 led to the essential growth of the earnings multiple P/E. At the same time, from the beginning of 70- th, the 10 year earnings variability has grown, practically, 3 times. Such situation can result in development of long-term stagnate sideways movement.