The Roaring 2020s

Key Concepts:

• S&P 500
• Earnings Expectation
• Price-to-Earnings (P/E) Multiple
• Roaring 2020s
• Decade Percent Changes
• Historical Market Performance

S&P 500 Projections and Historical Precedent

The S&P 500 is projected to reach between 9,000 and 11,000 by the end of 2029. This projection is based on earnings expectations and potential multiples discussed. Specifically, a target of 10,000 by the end of the "roaring 2020s" is noted. This represents a significant increase of 210% from the S&P 500's value of 3,230 at the end of 2019.

The question of whether such a gain is "delusional" is addressed by examining historical market performance. The transcript argues that this level of gain is not unprecedented, as it has been exceeded during three of the previous decades since the 1920s. This indicates that a "roaring decade" for the stock market is not an unusual phenomenon and has historical precedent.

Evidence of Historical Market Gains

To support the claim of historical precedent, Figure 12 is referenced, which displays decade percent changes in the stock market dating back to the 1920s. This figure illustrates instances where the market has gained over 200% within a single decade. Specifically, such gains were achieved in:

• The 1920s
• The late 1940s

The transcript also notes that the market "almost did it last decade," implying a near-miss of the 200% threshold in the 2010s.

Conclusion

The core takeaway is that the projected significant rise in the S&P 500 by the end of 2029, while substantial, is not an anomaly. Historical data, as presented by decade percent changes, demonstrates that the stock market has experienced similar or even greater gains in previous decades. Therefore, the idea of a "roaring stock market" is supported by past performance, making the current projections feasible and not inherently delusional. The reference to the "roaring 1920s" is used as an analogy for a period of strong market growth, not to suggest that such periods are exceptionally rare.