Below is the long-term relationship between 10-year treasuries and the yield on common stocks. Warren Buffett graudated around 1951 when the yield on the S&P was about 16%. Great timing.
Common stocks have sold much closer to the price of the 10-year post 1970 -- although it is unclear what exactly explains the change of the relationship. Is it inflation? Is it globalization? Is it a change of the accounting rules (thereby changing the definition of earnings)? Is it because of the new computational trading architecture? Is it because people who experienced the collapse of stock prices from 1929 through 1932 -- a 90% decline -- died off?