Bloomberg: Use consensus annual EPS expectations for several firms over the next 5 years and calculated the NPV sum using each company’s five-year (or extrapolated to that tenor) bond yield,then calculated what percentage of each company’s share price is represented by the NPV of those earnings, book value, and then the remainder. Valuations were pretty consistent by sector without regard for country of domicile. What appears to be “American exceptionalism” when it comes to market valuation might be better characterized as “technology exceptionalism” or “growth exceptionalism.” In other words, the U.S. valuation premium looks like a function of investors’ penchant for placing an extraordinarily high valuation on the distant earnings power of technology firms. What I found is that technology has one of the highest positive correlations between EPS surprises and share prices, and one of the lowest between earnings expectations and the price. #stocktalk