How the Potential Payback Period (PPP) Bridges the Gap Between Stocks and Bonds—and Revolutionizes Portfolio Management

This article introduces the Potential Payback Period (PPP) as an integrated valuation framework designed to reconcile the analytical divide between equity and fixed-income instruments. Unlike traditional metrics such as the P/E ratio, PPP accounts for earnings growth, discounting, and time, defining the period required for discounted earnings to equal the stock price. From this foundation, it derives four internally consistent return metrics: SIRR, SPARR, SIRRIPA, and SRP, which together decompose total shareholder return and enable direct comparison between stocks and bonds. A case study on NVIDIA illustrates the model’s flexibility, and practical applications are outlined for portfolio management and asset allocation. The PPP methodology offers a disciplined, risk-adjusted lens for evaluating investments across asset classes.