According to Compounding Quality on Twitter, an investor who bought the S&P 500 at a price-to-earnings (P/E) ratio of 5.3x in 1917 and sold at a P/E of 34x in 1999 would have achieved an 11.6% annual return, with only 2.3% per year attributable to P/E expansion. The majority of returns stemmed from earnings growth and reinvestment by the underlying companies (Source: Terry Smith via @QCompounding, May 28, 2025). This highlights the crucial role of fundamental growth over valuation multiples, a lesson relevant for crypto traders assessing the importance of utility and network growth versus speculative multiple expansion in digital asset markets.

According to Brad Freeman (@StockMarketNerd), the debate over whether SOFI is 'just a bank' is less important than its demonstrated ability to generate rapid earnings growth across market cycles. Freeman emphasizes that the rate of profitable compounding is a key factor influencing long-term returns, making SOFI an attractive investment for traders focused on sustained growth. For cryptocurrency market participants, strong earnings growth in fintech stocks like SOFI can signal increased adoption of digital financial services, potentially boosting sentiment and liquidity in the broader crypto sector (Source: Brad Freeman, Twitter, May 15, 2025).

According to Compounding Quality, the fundamental determinant of stock values is corporate earnings, with investor returns equating to earnings growth plus shareholder yield (from dividends and buybacks), adjusted for multiple expansion or contraction (source: Compounding Quality, Twitter, May 15, 2025). For traders in both stocks and cryptocurrencies, this highlights the importance of monitoring earnings reports, dividend announcements, and buyback programs, as these factors often influence broader market sentiment and can trigger capital flows between equities and digital assets, impacting crypto price trends and volatility.