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The shares of listed retailers have been volatile this year, ranging from -13% at the low end to more than 100% at the top end. The sector used to be regarded as glamorous and constituent companies regularly posted earnings and dividend growth in excess of 20% per year and enjoyed highly rarefied valuations.

But that’s changed now and rarely do companies exhibit such strong earnings growth. However, many of them still retain extremely elevated valuations. The only explanation for this is that the market is anticipating a return to sustained strong earnings and dividend growth and is prepared to wait for it. It may be a long time in coming...

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