The market value of any business will be determined by its economic performance. The most commonly applied and highly accessible proxy for performance are the earnings reported by its accountants and auditors. Cash dividends paid might be a superior indicator given how the definition of bottom-line earnings have changed over time. Cash flows may be better still but are less readily available.

Robert Shiller provides 148 years and 1,776 months of US stock market data. US S&P Index values, index earnings and dividends per share have followed a very similar path. The correlation between monthly prices, earnings and dividends, all up nearly 20,000 times since 1871, is close to one.

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