Dow 36,000!

Enrique Diaz-Alvarez enrique at
Wed Mar 17 09:05:13 PST 1999

Doug Henwood wrote:
> [If the risk premium for stockholding were to go to 0, then the return on
> stocks should approach that of a riskless asset like a Treasury bill, or
> 4.5%, rather than the historical 7-10% and the recent 20-25%. But let's not
> split hairs...]
Great piece. A leading candidate to the Irving Fisher Award.

I especially liked the way it likened "reported earnings" to "cash stream from stock investment", ignoring that in order to grow, a big chunk of those earnings need to be reinvested. In fact, going by dividend payout, we are already near that 1% yield level.

And I would _really_ like to know the details of those "calculations" whre a 1% payout growing at 3.3% a year equals a steady 6% payout.

-- Enrique Diaz-Alvarez Office # (607) 255 5034 Electrical Engineering Home # (607) 272 4808 112 Phillips Hall Fax # (607) 255 4565 Cornell University mailto:enrique at Ithaca, NY 14853

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