two questions:
1. the publicly traded sector as a share of the economy. In other words, what if private non-publicly traded businesses increase at the expense of publicly traded businesses? Or vice-versa?

2. Globalization. Suppose the multinational companies traded in the US stock market take up 2 percent of India's GDP today. If in 20 years they take up 20 percent, and India's GDP grows rapidly as well, what effect will this have on the US stock market? Ditto Africa, China, South America, etc.

We're not exporting capital, we're importing capital. On net GNP will grow slower than GDP, not faster--which means that incomes (including profits) will grow slower than production in the U.S.

It's very hard to see a scenario in the future in which U.S. GNP includes profits earned overseas as a positive rather than a negative contribution.

I'll throw these sources back into the ring--some other DeLong interlocutors have referred to them as well in the last few days. Much longer data series, adds supplementary international data. By no means the final word, but nice to chew on--and the gap is 2%, not 1%, according to these gentlemen.

http://www.arpllp.com/core_files/The%20Two%20Percent%20Dilution.pdf

http://www.efficientfrontier.com/ef/702/2percent.htm

I also note that Arnott/Bernstein suggest that productivity, per capita GDP growth, and per share earnings + dividends grow at about the same rate given enough time. A corollary suggestion is that if earnings and dividends are growing faster than productivity, the economy is shifting from rewarding labor to rewarding capital--and that a marked shift either way is likely to mean-revert: "such a change in the orientation of the economy cannot continue indefinitely."

I think that Norquist, Rove, Cheney et al would beg to differ. If productivity keeps slowing, we may see this put to a practical test in the next several years. Look at a graph of unit labor costs (www.economagic.com) since W took over (they've fallen, for the first time in fifty years), and bear in mind that benefit costs rose at a rapid clip over the same period.

In Norquist's Valhalla, there is no labor share of national income, just a capital share, and the castle of the Valkyries is replaced by a very large gated community.

-NM

We are assuming the price earning ratio stays a constant. Economic growth is assumed to be 1.9%. Then growth in earnings can be 0.9% and stock buybacks can be 1.0%, which gives 1.9% stock returns for these sources. Add in current dividends which are 1.4% for the Vanguard Total Stock Market Index. That gives us 3.3% real stock returns [6.3% nominal returns].

The only ways in which long term stock market returns are likely to be more than 3.3% are faster economic growth or higher p/e ratios.

roublen-

on your point 1; I am extremely curious about this as well. I have never seen a breakdown or analysis of publically-traded vs. private business shares of national income over time. If anyone knows of a source, I'd be grateful if they would point it out, especially if it includes the 19th century.

on your point 2; last two hundred years of data suggest that in the long run everyone ends up growing 2-4%/year real. Convergence (asian tigers, post-Mao China) or reconstruction (Japan 1945-75) can drive nations well above 3% for quite a while, but if memory serves no one has pulled it off for longer than 40-50 years.

So, U.S.-based multinationals could grow earnings/dividends faster than 2-4% (though note dilution) if they progressively gained a larger share of global income--but that process is terminal and reversible; how far could it go, really? Or, they could shift operations towards countries that are converging or reconstructing. Tough sledding, though--risky, extremely complicated, difficult to explain to shareholders....

To expect long-term dividend/earnings growth north of 4% is to engage in fantasy.

-NM

Is it an empirical or logical issue? I can get a 6.5% yield (a dividend yield of 5.6% with 0.9% earnings growth)by net investment equal to earnings (6.5% times investment) times earnings growth (0.9%) over earnings price (6.5%). E/P and D/P are constant while earnings and investment increase at 0.9%.

It's very hard to see a scenario in the future in which U.S. GNP includes profits earned overseas as a positive rather than a negative contribution.

I'm almost certainly missing something, but just in case, one more nagging doubt: Are "US GNP/GDP" and "income of corporations traded on US stock exchanges" the same thing? Do they have to move in the same direction, in roughly the same magnitude? (minus the return to "future entrepreneurship", as you point out)

In other words, US GNP might grow less than GDP, but perhaps if publicly traded companies took up an increasing share of the world economy, and if foreigners owned an increasing share of the US stock market, the US stock market could still stay at high levels?

I do in fact fear that the stock market will go down/underperform, and am kind of playing the angel's advocate, FWIW.

What data source do you use for S&P earnings?

Also, what data source do you use to estimate the net effect of a) anti-dilutive stock buybacks, b) dilutive stock options and c) dilutive issues of new shares?

"Economagic" for the data sources.

Since WW II S&P earnings -- operating earnings after 1990 -- have grown at a compound trend growth rate of 7% and after tax corporate profits growth has been 7.5%. Their share of nominal GDP has average 3% and 6%, respectively.

There is good economic reasons in a competitive economy to think that profits share of gdp should not change much on secular basis even though they experience large cyclical swings.

The way the capitalist system works if the supply from an economic sector is less then it ought to be that sector will earn excess profits. Those superior earnings will attract an increased capital flow to that sector and building of new-- and normally excess capacity --
until capacity in that sector expands and it suffers falling profits -- it which points capital flees that sector to another.

Consequently, in a free market no industry without some significant barier to entry can earn excess profits. This means that profits share of the pie is unlikely to change significantly.

Interestingly, since 1870 -- as far back as the data goes -- the stock market pe plus the dividend yield has averaged 19. In other words, investors can take their return in the form of capital gains or diviends and it does not make any difference.

Dear Brad

I particularly liked this point in the earlier post on CEA predicts stock market crash. Now I like it even more.

I propose another way to do the calculation, which is also crude but is different so wrong in different ways.

It would be nice if you could find a series on total profits of publicly traded corporations (New York Stock exchange plus Nasdaq plus Amex). Dilution due to new firms would appear as growth of this minus growth of S&P 500 profits.

Also profits of firms in a fixed as of Jan 1 1960 market portfollio would (under efficient markets) be equal to the total market profits minus value of IPOs. That is to divide the moolah into the part of capital and the part of new entrepreneurship, you can measure the part of new entrepreneurship with IPOs. To buy and hold the market you have to shell out your share of each IPO. This is a simple cash flow which can be subtracted from dividends plus capital gains with constant p/e (blah blah for profits). The IPO series is easy (Shiller has it).

Shouldn't it be the wedge you want ?

I'm sure I'm being obtuse, but I don't get the argument. It seems to assume that I freeze my portfolio, so it won't participate in future companies' growth. But I can reconstitute my portfolio, just like the S&P does regularly (the turnover in the S&P 500 is about 14% a year), to include all of them in the following year. I would understand the argument if I was shown that over one period in which I hold my portfolio frozen non-portfolio companies generated more profit growth than the index companies.

"Buying ... doesn't give you ownership of future returns to future entrepreneurship."

It does if existing companies are entrepreneurial -- which they sometimes are -- or if they can acquire entrepreneurial companies at low cost because they hold complementary assets (eg, distribution). It also does if, as the previous post suggests, the indices that you're measuring change to embrace entrepreneurs and chuck out aging capital.

Schumpeter was wrong to argue that all innovation and entrepreneurship will accrue to capital. But it seems equally wrong to argue that none of it will.

Anne: Thanks for the link. I could not find
the data for S&P earnings and share dilution on that site. Do you know the exact URL for this data?

In contrast to GDP growth, the average growth in S&P earnings appears to be sensitive to the time period you chose to average over.

If you chose the period 1961-2000, you
get 2.4%. If you look at 1931-2000, you
get 2%. If you look at Schiller's data from 1871-2000 the average is 1.7%

1871 thru 1880 0.035876611
1881 thru 1890 -0.020021824
1891 thru 1900 0.048573684
1901 thru 1910 0.021457801
1911 thru 1920 -0.057385869
1921 thru 1930 0.056462478
1931 thru 1940 -0.002883268
1941 thru 1950 0.037634290
1951 thru 1960 0.004560904
1961 thru 1970 0.023053377
1971 thru 1980 0.025274714
1981 thru 1990 -0.009060511
1991 thru 2000 0.059058399

How much of the difference between
earnings growth and GDP growth is caused
by share dilution of existing companies
through options and new share
issuance and much is caused by new enterprises?

M Delong claims that there is net share anti-dilution. That is in marked contrast what I
see in almost every annual report I read where
I see, despite share buybacks, fairly steady dilution. And it contrasts with Arnott's claim
in the paper cited in a previous post.

If anyone can recommend a data source for these questions, I'd be interested to see some hard numbers.

You mean a diversified portfolio of publicly traded stocks, I take it. Someone - the entrepreneurs, VC investors, etc. gets the capital gains from non-public firms.

I'm not sure I see why this is important.

Does this mean that (ignoring foriegn investments & earnings) one would expect it to be better, in some sense, to base Soc. Sec. off the growth of the economy (pay-as-you-go) than off equities (private accounts)?

I also have a question. And I too am shy that it may seem dumb.

But does growth theory provide some sense of the equilibrium pace capital of injections from outside the corporate sector and does this tell us something about the likely sign on net equity issuance and dilution? I don't know the arithmetic, but my intuition tells me that the corporate sector is naturally an absorber of capital from the household sector. Accordingly, I doubt that reverse dilution is an equilibrium condition. My guess is that with a moment's introspection Delong can do the math.

Separately, irrespective of the difference between gDp and gNp, shouldn't profits grow in line with an acronym starting with an N?

Finally, a quibble. I think the distinction that Delong draws between GDP and GNP is kind of irrelevant as regards the trend in corporate profits. Rather, it goes to who ultimately owns the profits. So long as the owners of a company are passive, the profitability of a firm should be invariant to where its owners live.

It is true that American wealth accumulation is a function of American savings, and Delong is right to point out that government dissaving is slowing American wealth accumulation. But that issue is separate from the question of how our savings should be allocated once made. If an American firm is going to grow rapidly, I want to own it, even if most of my fellow shareholders are Japanese. I'm a liberal.

http://www.economagic.com/

Economagic has all sorts of data series but the specific S&P earnings and share dilution data may not be available readily unless we use a Bloomberg machine. I am going to ask.

About share dilution, John Bogle has mentioned a number of times that when he looks to confirm share buybacks he is disappointed that announced buybacks are often not executed. We know what is returned to shareholders in dividends but buybacks are another matter. After all, many buybacks simply cover options grants. I have long wondered why price earnings ratios for the S&P have not fallen much below 20 through this bear market and high earnings period. I can not answer the question....

I think Brad's quick & dirty analysis is flawed.

Logically, if S&P earnings growth is lower than GDP, then S&P earnings as a % of GDP would be higher in the past than today. I don't have the exact numbers, but a proxy using corporate profits after tax shows that corporate profits as a % of GDP has been static at 5.6% using 1960 and 2000 years for comparison. If I use Brad's differential growth rates, it suggests that corporate profits should be ~ 8.6% of GDP, a very discrepancy with the actual data.

If the S&P500 reflects this result, then I would argue that the basic premise of lagging S&P500 earnings, whilst correct, is not really significant. It seems to me that if a portfolio of the S&P500 is reconstructed every year, one will capture much of the growth of new companies that enter the economy, so that the lag will be very small, certainly much smaller than Brad suggests.

Source data: www.economagic.com

From BEA's NIPA data for 2003 (by the way, they also have historical data back to 1929)

http://www.bea.gov/bea/dn/nipaweb/index.asp

I calculate the following percentages of GNP

56.9% Compensation of Employees

12.2% Consumption of fixed capital

9.2% Corporate Profits (adjusted)

7.5% Proprietors' income (adjusted)

6.8% Taxes on production and imports less subsidies

4.9% Net interest and misc payments

1.4% Rental income of persons (adjusted)

0.7% Business current transfer payments

http://www.vanguard.com/bogle_site/april162001.html

The Sources of Stock Market Returns
By John Bogle

With apologies to Dickens, I turn again to a tale of two markets . . . but a tale of two other markets: Stock markets past, and stock markets yet-to-come. Do we have everything before us, or nothing before us? To answer that question, we must look at the U.S. stock market in total, well-represented by the Standard & Poor's 500 Stock Index, which includes both listed stocks (now 85% of its value) and Nasdaq stocks (15%). Let's begin with the eternal mathematics of the stock market, in which returns are derived from two distinct elements: Investment, and speculation. Investment return is represented by the sum of a stock's dividend yield plus the rate of its earnings growth: It tends to be steady, recurrent, and almost always positive.

Speculative return is measured by the willingness of investors to pay more—or les—for each dollar of earnings: It is intermittent, spasmodic, and may as easily be negative (a falling price/earnings ratio) as positive (a rising price/earning ratio). Simply adding the two elements together gives us the total market return. But over the long run, it is investment return—earnings and dividends—that calls the market's tune. Consider the past 40 years: Dividend yield plus earnings growth came to a total of 11.2% per year. The actual return of the stock market came to an identical 11.2%.

If speculative return came, as it did, to zero over the full period, in the short-term, and even over extended periods, it plays a crucial role, beautifully exemplified by dividing that 40-year period into two equal 20-year segments. Both periods saw excellent annual investment returns: 12% during 1961-1981; 10% during 1981-2001. But speculative return subtracted 4½% in the first period and added 5% during the second. Result: a market return of 7½% in the first 20 years, and 15% in the second.

Curiously, despite a lower rate of corporate earnings growth and dividends during the second period, the annual return on stocks doubled. Why? Because the price/earnings ratio, which had tumbled from 22 times in 1961 to 8 times in 1981, had returned to 20 times in April 2001 (after reaching an astonishing 32 times at the market high in March 2000). The point is that the economics of market returns—the earnings and dividends of America's corporations over two centuries—are almost always both predictable and productive. The emotions of market returns, on the other hand—the change in the price that investors are willing to pay for each dollar of earnings—are unpredictable, at times remarkably productive; at other times, remarkably counterproductive.

This dramatic example of the two forces that determine stock returns—investment and speculation—helps us look ahead and consider what returns we might expect over the coming decade. We begin with a dividend yield that is only 1%, a fraction of the historical norm of 4%. That, to put it bluntly, is not a lot of gas in the market's tank. But if we assume that corporate earnings growth will continue at its 7% annual rate of the past 40 years, stocks would enjoy a total investment return of 8% annually during the coming decade.

John Bogle writes that corporate earnings growth was 7% from 1961 to 2001. The price earning ratio for the S&P Index was 22 in 1961 and 20 in 2001. Returns for the S&P through the 40 year period were 11.2%, which is equal to earnings growth and dividends.

If we assume earnings growth can continue to be 7% with dividends at 1.6%, we might expect S&P growth to be 8.6% over the coming decade if the p/e ratio is constant....

John Bogle's work make sense to me. When he presented just this analysis in a lecture and seminar at MIT, there were no contradictions. The base assumptions are that we can grow at about the rate from 1961 to 2001, and p/e ratios will be about 20 in a decade or longer. Of course, if economic slows for a sustained period we can expect lower earnings growth and lower stock market returns.

I seem to be contradicting Brad, which should always be done with considerable, and my own growth based assumptions, but Bogle makes sense for now. Where then am I wrong?

Brad should only be contradicted with considerable "caution." Where then am I wrong?

That is very misleading, Anne. There is a reason people doing analysis usually look at real rates, not nominal.

CAGR for the CPI from 1961 to 2001 was about 4.6%. So real earnings grew at only about 2.4%.

Agreed.

Suppose real earnings grow at 2.4% for the coming decade. Vanguard S&P Index dividends are currently 1.6%. Then we might expect S&P returns to be 4%. [Nominal returns would be 7%].

February 1, 2005

Many Unhappy Returns
Paul Krugman - New York Times

The yield on a stock comes from two components: cash that the company pays out in the form of dividends and stock buybacks, and capital gains. Right now, if dividends and buybacks were the whole story, the rate of return on stocks would be only 3 percent.

To get a 6.5 percent rate of return, you need capital gains: if dividends yield 3 percent, stock prices have to rise 3.5 percent per year after inflation. That doesn't sound too unreasonable if you're thinking only a few years ahead.

But privatizers need that high rate of return for 75 years or more. And the economic assumptions underlying most projections for Social Security make that impossible.

The Social Security projections that say the trust fund will be exhausted by 2042 assume that economic growth will slow as baby boomers leave the work force. The actuaries predict that economic growth, which averaged 3.4 percent per year over the last 75 years, will average only 1.9 percent over the next 75 years.

In the long run, profits grow at the same rate as the economy. So to get that 6.5 percent rate of return, stock prices would have to keep rising faster than profits, decade after decade....

Paul Krugman's analysis suggests earnings growth at 1.9% and stock dividends and buybacks at 3%. So, we can project real returns to be 4.9%. [Nominal returns would be 7.9%].

The 1.9% economic growth or earnings growth estimate is taken from the actuaries for Social Security.

How does population growth play into the large-cap index returns?

My guess is that population growth tends to increase the relative advantage of larger companies, by increasing economies of scale. Slowing population growth, then, should work to the relative disadvantage of large established firms. But I'm just guessing.

"But the earnings on your portfolio next year will be less than next year's publicly-traded corporate profits. Some profits next year will be earned by companies that did not exist or weren't publicly traded this year. So earnings growth for your portfolio will tend to be lower than profit growth for the economy as a whole."

This argument seems specious: One is interested in profit growth within the portfolio, not in whether the portfolio captures a share of the profits of every public company. There is no reason to assume that the average of all non-public enterprises is growing faster than the average public company.

Some of the public companies you bought will go bankrupt and vanish. New companies will go public and join the index but not to be owned by you. Lots of non-public companies will die off every year, kind of like restaurants in NYC. After a very long time, your portfolio will look like a statistical sampling or index of the public company market; and it should grow at the same rate.

Gerard asks
"But does growth theory provide some sense of the equilibrium pace capital of injections from outside the corporate sector ... my intuition tells me that the corporate sector is naturally an absorber of capital from the household sector. ... My guess is that with a moment's introspection Delong can do the math."

The guess is probably right, that is, DeLong can answer the question in a moment (based on the work of Abel Mankiw Summers and Zeckhauser). In the most standard Solow Swan growth model, the corporate sector can not be an absorber of capital from the household sector. This is a theoretical possibility in other models (OLG models). However, the evidence suggests that no country has an absorbing corporate sector. Certainly certainly not the USA. After wasting many pixels I note that I am talking about buybacks plus dividends minus new share issues not buybacks minus new share issues -- the question was, to me, vague on whether dividends are included.

dear Pete, you are missing the point. Brad was distinguishing between publicly traded companies whose shares you own and publicly traded companies whose shares you have to buy (because they don't exist yet). He was not saying anything about publicly trades vs privately held.

Dear atolley

Brad did not claim that S&P profits will decline as a share of GNP. He claimed that the share of profits earned by firms which are *now* in the S&P 500 will decline. The S&P 500 has considerable turnover (I seem to have read 14% above) as firms grow to be big enough to be included and others stagnate and fall out. To hold the S&P 500 you hvae to buy and sell shares, buying the shares of firms that have grown fast and selling the shares of firms that have grown slowly. This is very costly. You can't buy and hold the S&P 500, you can buy today's S&P 500 which will almost certainly be worth less than future S&P 500s in the future. Or you can constantly shell out cash to keep your 500 shares the current S&P shares.

I still wonder about using a total publicly traded company protfollio. Then you shell out for IPOs and gain from buybacks. Total net share issue is known (and probably included in the 1% buybacks alread). I suspect the -1% S&P 500 vs NIPA profits wedge detected by Brad is a small firm effect not an unavoidable dilution effect. That is, I think the -1% problem is that the S&P 500 was a bad buy over the period compared to the total market portfollio.

I am pretty sure that total value of IPOs is the correction term Brad wants.

The slower growth rate of earnings per share (EPS) than earnings has been cleverly shown by William Bernstein to be the result of dilution of EPS by companies issuing more shares.

http://www.efficientfrontier.com/ef/702/2percent.htm

I'm not sure why Brad doesn't refer to this. This seems a much better explanation that Brad's.

Robert, it is not so expensive to keep up with the S&P500. The latest S&P500 index funds and ETF's manage to do it very cheaply. Some even manage to pick up a few basis points by skill in trading (bid/ask spread and futures strategies)

Brad DeLong

We are assuming the price earning ratio stays a constant. Economic growth is assumed to be 1.9%. Then growth in earnings can be 0.9% and stock buybacks can be 1.0%, which gives 1.9% stock returns for these sources. Add in current dividends which are 1.6% for the Vanguard S&P Stock Market Index. That gives us 3.5% real stock returns [Nominal returns of 6.5%].

The only ways in which long term stock market returns are likely to be more than 3.5% are faster economic growth or higher p/e ratios.

....

Paul Krugman

Paul Krugman's first analysis suggests earnings growth at 1.9% and stock dividends and buybacks at 3%. So, we can project real returns to be 4.9%. [Nominal returns of 7.9%].

The 1.9% economic growth or earnings growth estimate is taken from the actuaries for Social Security.

Paul Krugman's second analysis suggests earnings growth at 3.4% and stock dividends and buybacks at 3%. So, we can project real returns to be 6.4%. [Nominal returns of 9.4%].

The 3.4% economic growth or earnings growth estimate is the rate for the last 75 years.

....

John Bogle

Nominal corporate earnings growth was 7% from 1961 to 2001. The price earning ratio for the S&P Index was 22 in 1961 and 20 in 2001. Returns for the S&P through the 40 year period were 11.2%, which is equal to earnings growth and dividends.

If we assume earnings growth can continue to be 7% with current dividends at 1.6%, we might expect S&P growth to be 8.6% over the coming decade if the p/e ratio is constant [Real returns of 5.6%].

The Vanguard S&P Index return was 11.43% for the last 10 years, while the Index return was 11.51%. A difference of .08% a year in return shows portfolio costs can be quite low. The Vanguard S&P return was 12.25% from 8/31/76 to 1/31/05.

The current p/e for the Vanguard S$P is 19.6%, the dividend 1.6%.

http://www.roubiniglobal.com/setser/archives/2005/02/can_the_us_lear.html#comments

Brad Setser poses another imporant problem in projecting long term interest rates:

Why are we not issuing 30 or 50 year Treasury bonds when long term interest rates are so low? This approach to the debt seems to be in accord with the projections of Alan Greenspan that there is little reason to assume long term interest rates will rise meaningfully over time. I am completely puzzled. Paul Krugman tells us to lock in a long term mortgage, the Fed chief tells us to stay with a short term adjustable mortgage.

Of course, I say sell 30 or 50 year bonds at the current long term rates.

Erik wrote, "From BEA's NIPA data for 2003 (by the way, they also have historical data back to 1929)..."

Which shows you how corrupted modern economics is.

Where is Ricardian land rent in the NIPA tables?

From
http://www.progress.org/cg/gaff1004.htm :
-----------------------------------------
The standard source of data on GNP and its components is the National Income and Product Account (NIPA), kept and published regularly by the U.S. Department of Commerce. When it comes to rent, however, NIPA depends on the IRS figures, which thus are passed along to all students of economics as the "official" accounting. We have just seen how far from reality these data are. NIPA is worse, in a way, because NIPA explicitly excludes "capital gains" from National Income. That is, first the IRS converts rents into capital gains, and then NIPA banishes capital gains from GNP, National Income, and National Product. "Capital gains" is an artificial term, that includes all gains realized from the sale of what Congress defines at any time as "capital assets." "Capital assets" include land and improvements, housing, common stock, growing timber, breeding herds (including race and show and riding horses), mineral and hydrocarbon reserves in the ground, and several other favorite holdings of the rich and well-connected. As we saw in "b", most commercial rents show up as capital gains, so that NIPA does not report them at all.

To Robert Waldmann

I didn't claim that Brad's claim was wrong, but rather his calculation was flawed. He uses GDP growth as the proxy for all company activity in the economy and the S&P earnings growth as the public market that the individual can buy. From this he comes up with the calculated 1% growth shortfall. Now I may be wrong and that he did in fact construct fixed portfolios of stocks in each of the periods, but I didn't get that message from the posting. If I am correct, then I stand by my claim that Brad's calculation is flawed for the reason stated.

Regarding your point about the cost of portfolio rebalancing. This is done by index funds at very low costs. Yes, there is some cost, but, for example, Vanguard's S&P500 index fund has a 0.18% expense ratio, which I think is fairly small.

To falsify my claim you would have to show that the return on index funds was less than GDP. Although it is far too short a period to take (I don't have a longer set for the funds returns), for the last 10 years the Vanguard S&P500 fund has returned 11.5% pa, vs the nominal GDP average growth of ~7%. If anyone on this thread has the data and can do the calculation that shows an index fund return as being ~1% less than GDP growth, then my claim is falsified and Brad's is supported.

BDL stated, "your capital gains will be the the rate of growth of stock prices, which will be the same as the rate of growth of earnings of the stocks in your portfolio."

I've seen this graphically, but why is it so?

Ibbotson has done a lot of these decompositions
but I could never find the accounting link between GDP growth, earnings growth and stock price growth.

On average S&P earnings growth has been 10.7%
nominal since 1920 while nominal GDP growth
has only been about 6%. What is that wedge?
Risk? Where does it show up?

Thanks,
David Brat

[stock buybacks push up earnings growth--you can put them with either dividends or growth, and the S&P index puts them with growth]