Why GDP Growth Doesn’t Match the Growth of the Stock Market (and other lessons)

Here’s a few things I recently learned about the stock market.

1. a) The GDP grows at around 4% and that maps closely to corporate earnings growth (at around 4.8%).
   b) Dividend yields come out to around 4% and dividends aren’t counted in GDP.
   c) Corporate earnings + dividend yields = ~ the historical gains of the stock market
2. U.S companies get 50% of their revenue from international sources. There’s built-in international diversification in the S&P500.
3. Buying the S&P500 on margin is a -EV play. You can get 20% of your equity as margin and be protected from a margin call until the market drops >40%. Once you factor in the interest, it starts to make little sense.