SDS (Seductive ...'s  Instablog

SDS (Seductive Dividend Stocks)
Send Message
Sorry I hide my true identity but I'm a physicist/engineer, native contrarian and idea generator. I am an eclectic dividend investor with motto "In God We Trust, All Others Pay Cash" applied to companies I invest in. I like to read /and read a lot - did you look on my SA photo 8-)? / including... More
My blog:
SDS blog in Seeking Alpha
  • S&P Yield 1926-2012 2 comments
    Aug 24, 2013 1:49 PM

    24 Aug. 2013

    I just plotted data from good WW site www.measuringworth.com/datasets/sap/result.php

    to see what happens:

    Distribution S&P Annual Yield

    Quantiles

         

    100.0%

    maximum

    8.7100

    99.5%

     

    8.7100

    97.5%

     

    7.2820

    90.0%

     

    6.0500

    75.0%

    quartile

    5.2300

    50.0%

    median

    3.9400

    25.0%

    quartile

    2.9800

    10.0%

     

    1.9480

    2.5%

     

    1.2120

    0.5%

     

    1.1400

    0.0%

    minimum

    1.1400

    Moments

       

    Mean

    4.0421839

    Std Dev

    1.5707756

    Std Err Mean

    0.1684048

    Upper 95% Mean

    4.3769616

    Lower 95% Mean

    3.7074062

    N

    87

    So in last 87 years average Yield was ~ 4% and together with magic number ~ 6.65% of DGR (seekingalpha.com/instablog/725729-sds-se...) it gives us ~ 10.6% of return which is very close to number often quoted as total return.

    On another hand Internet bubble drived S&P total return to high number (from ~ 8% before bubble to ~ 11% after the bubble collaps in ~ 2001). Nevertheless after ~ 1997 and till now market cap still seems on high note to compare with US economy (see picture below from www.vectorgrader.com/indicators/market-c...)

    (click to enlarge)

    I don't know if we will return to previously normal market-cap/GDP ~ 0.6 or ratio ~ 0.8 will be new norm.

    21 Nov 2013

    Just for fun I compared S&P500 prices in 1950-1975 (multiplied to 20) and from 1990 till today using Yahoo data for adjusted closed prices for ^GSPC. The graph below

    (click to enlarge)

    show IMO some similarities. Of course today (21 Nov 2013) we do not have 25 years data starting from 1990, so future will show if history repeat itself. Disclaimer: I don't like technical analysis.

Back To SDS (Seductive Dividend Stocks)'s Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (2)
Track new comments
  • DGyoungster
    , contributor
    Comments (20) | Send Message
     
    I use 3% yield and 7% DGR for my model based on your calculations. Combined with avg. "Real" Inflation and tax/currency losses this allows me to calculate my needed savings rate to retire on DGI income.

     

    Here is the catch: By using these numbers we assume that the world is able to grow as fast/good as the last 80 years. What if that growth is Not sustainable?
    8 Sep 2013, 03:32 AM Reply Like
  • SDS (Seductive Dividend Sto...
    , contributor
    Comments (4471) | Send Message
     
    Author’s reply » DGyoungster

     

    Well I'm a data riven optimist, and form history I learn that:

     

    a) Growth of dividends was not uniform and there were periods of negative DCR (e.g. in ~ 1930 and in ~2009). For a contrarian it was best time to buy stocks.
    b) World invests very huge $$$ in medical research in last ~ 25 years and people live longer in XX century than in XIX one in developed countries during no war times.
    c) As far as I know /I might be wrong/ nights without sleep reduce the human life time. Nobody has data but it seems me that DGI reduces number of nights without sleep /I'm writing it at ~ 2:30AM but I do not sleep because an experiment in nanotech, not due to my stocks/.

     

    So if you are 27 years old now you have a good chance to live 80 more years /didn't I tell that I'm an optimist 8-)/.

     

    SDS
    8 Sep 2013, 05:33 AM Reply Like
Full index of posts »
Latest Followers

StockTalks

More »

Latest Comments


Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.