Empirical Validation of the PPP-SIRRIPA Framework: A Groundbreaking Approach to Equity Valuation

Validation empirique du modèle PPP–SIRRIPA: Une approche révolutionnaire de l’évaluation des actions

Rainsy Sam ()
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Rainsy Sam: LArA/ICD (PROPEDIA) / International Management School Geneva (IMSG)

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Abstract: The PPP-SIRRIPA framework has been introduced as a groundbreaking contribution to equity valuation by generalizing the traditional Price-Earnings (P/E) ratio. The Potential Payback Period (PPP) incorporates earnings growth, discount rates, and risk into a time-based expression of stock valuation. The Stock Internal Rate of Return (SIRR), derived from PPP, mirrors a zero-coupon bond's yield-to-maturity (YTM), while SPARR captures valuationmultiple effects. Together, these components yield SIRRIPA-the stock analogue of a bond's realized IRR-having taken into account the difference in risk level.Previous published works consisted primarily of theoretical development. This article provides the first empirical validation. Five PPP-based analyses published over the past year-covering the S&P 500, Palantir Technologies, NVIDIA, Intel, and general U.S. market behavior-are reviewed ex post using current market data (October 2025). In each case, the PPP-SIRRIPA framework demonstrated strong explanatory capacity and correctly anticipated subsequent directional price developments. These results support the view that explanatory coherence is the foundation of predictive capacity. This empirical evidence strengthens the case for PPP-SIRRIPA as a superior alternative to traditional valuation measures.

Keywords: Equity Valuation; Cross-Asset Comparison; Price Appreciation; Realized IRR; Zero-Coupon Bond; Yield to Maturity; Internal Rate of Return; SIRRIPA; SPARR; SIRR; Potential Payback Period (PPP); Potential Payback Period (PPP) SIRR SPARR SIRRIPA Equity Valuation Internal Rate of Return Yield to Maturity Zero-Coupon Bond Realized IRR Price Appreciation Cross-Asset Comparison (search for similar items in EconPapers)
Date: 2025-10-31
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