I say natural because I'm under the premise that companies on the stock market are inflated due to people/institutions fleeing out of worthless currency. A monetary system that does not provide any possibility to save to keep purchasing power constant will cause flight into consumerism and investing.
Let's take the example of a pizzeria. If a pizzeria makes 2 Bitcoin of yearly profit (not revenue) the company obviously should be worth more than this yearly profit - or else one could buy the company, literally earn the investment back and then sell it again. Would make no sense due to arbitrage.
Now depending on risk of this specific pizzeria (very low for pizzarias I assume) and its growth (very low for pizzarias I assume) I think it feels very natural to value it at 20 to 40 Bitcoin. That would be worth 10 to 20 years. That is a significant chunk of a human lifespan.
So my strategy would be to value companies based on the lifespan of humans. When investing, we sacrifice consumerism that we would be entitled to and the potential security of just saving by hodling Bitcoin.
With that in mind I do not actually think that S&P500 companies are inflated that much: https://finviz.com/map.ashx?t=sec&st=fpe These companies are big, secure and grow a lot. Probably still a bit due to fiat money but not as bad as I expected.
I believe your POV is consistent with how many investors view company valuations. Tech is known to have a higher multiplier (I've heard 30 but idk).
My question is if there is a natural constant to this in a different monetary system. Obviously a human lifespan would be the same length - but what about the rest?
I guess the time value of money changes when moving from inflationary to deflationary money. Multiples would likely shrink because you could just hold the money and get some risk-free return.
I suspect there's some relationship between multiples and the risk-free rate of return. Certainly seems like when bonds have low returns stocks have high returns.
I think the natural P/E of ancompany, absent inflationary currency pressure and/or assuming the inflation pressure is cancelled out by the P/E measurement, is based on risk, growth potential, competition, the number of stocks issued, the earnings of the company and the present interest rate. I'm no financial guru, and I'm just guessing here, but I'm related to someone who used to roommate with the brother of a high school friend who got into a bar fight with a guy who's dad might know the answer to this... but I suspect that an extremely low risk, low growth, and low competition stock like utilities or life insurance would have a P/E that's equivalent to the bond interest rate of that same company. If they had to pay 5% on a bond, they should probably have a P/E around 20.