Average trend EY in the US since 1916 equates to a multiple of 13x. Average trend EY in the US in the last 50 years equates to a multiple of 16x. Average last five years and also current, 30x.
Maybe multiples will stay this high. I'm not saying they won't--the future hasn't happened yet. But I for one sure wouldn't wager money on it.

I've been trying to think, is there some fundamental reason that a $1 of earnings per year would cost more sometimes and less other times?

And I think I've got it. In a world in which there is very little capital investment, the investments made are the "low hanging fruit". That is, if the average laborer doesn't even have a $10 shovel as her capital investment, then when she is hired to dig ditches her productivity is pretty low, and perhaps buying $10 shovels for your ditch diggers yields a 8% return in perpetuity on your investment. But future increases in productivity require buying a $10,000 mini-bobcat which maybe yeilds only 6% on your marginal investment over buying shovels. And later, buying optimus robots for $150,000 each yields only a 3% earnings improvement beyond your bobcat-provisioned labor pool of ditch diggers.

So do we think that there should be a natural decline in the yield of capital investment as we get more and more capital investment in our economy? That each time we triple the value of capital equipment our workers, on average have to use, we only double their output?

I've thought about this for a grand total of about 4 minutes by now, and so far it seems like it might be right.

R: