Through Dec 2023

Financial Physics Presentation

Financial Physics

This presentation introduces the core “Financial Physics” model. The key factors include Real GDP, Inflation, Nominal GDP, Earnings Per Share (EPS), and P/E Ratio. Since real GDP has been relatively constant over extended periods and all other factors are driven by inflation, a primary driver of the stock market is the inflation rate—as it trends toward or away from price stability. Given the recent state of volatile inflation and the possibility of it either rising (inflation) or declining (deflation), the market P/E ratio may be vulnerable to decline. As the P/E ratio declines and EPS grows, the result could be another relatively non-directional market.