DOW 36,000 Redux

Enrique Diaz-Alvarez enrique at
Thu Aug 19 17:42:13 PDT 1999

Doug Henwood wrote:

> Enrique Diaz-Alvarez cited two bulls:
> >This means that, assuming no risk
> >premium is accorded stocks, the proper dividend yield for stocks should
> >be 0.6%.
> Average dividend yields by decade, U.S. stocks

This doesn't address their thesis: that, for the last two centuries, investors have been irrationally cautious, and that only lately have they become rational enough to realize that stocks should be treated just like T-bills. The point is that, even assuming this is true, the DOW is seriously overvalued, and they can only sustain their projections by lying about the numbers.


> Doug

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