Invert, always invert – energy crisis edition

On 17 March 2020, I published one of my most read posts of all time. Back then, we were approaching the heights of the pandemic panic and I said that if you invert current market prices and back out how many years of no earnings growth companies would have to have in order to justify the market levels seen back then. It was easy to show with this calculation that markets were overly pessimistic back then. Little did I know that markets would bottom within a week and then rapidly rebound.

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