Over the years, I have frequently emphasized that stocks are not a claim on "forward operating earnings." They are not even a claim on reported net earnings (and should not be valued as a blind multiple to a single year's results in any event). They are a claim on a very long-term stream of future cash flows that will actually be delivered to investors as dividends, or retained on their behalf as an increment to the book value of the company.
The differences between these various measures of corporate performance are striking. If it seems like this point is simply academic, ask Warren Buffett (who refers to those actual, deliverable cash flows as "owner earnings"). Every year, the first page of Berkshire Hathaway's Annual Report contains a table of the company's year-by-year performance. The table does not report the stock price performance of Berkshire Hathaway. Rather, it shows the annual growth in the company's book value, compared with the total return for the S&P 500. Since Berkshire does not pay dividends, the growth in book value captures "owner earnings," which Buffett clearly views as a sufficient statistic for his investment performance. Of course, the long-term growth in book value has been closely linked to the long-term performance of the company's stock.