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  • Equity Risk Premium Levels Suggest March Lows Will Hold [View article]
    "Earnings" are what the accountants want to say they are. The real cash-in-pocket spendable, investable yield comes from dividends. Not a day goes by without another dividend-cut announcement. Falling prices have been/will be chasing falling dividends in a race to the bottom. Until price declines get ahead of dividend cuts, the market will continue to go down.

    The dividend yield on the Dow at the end of the crash in '29 was 16%. This bear is of a greater-degree than that one due to the massive deleveraging that is going to continue to take place. The Dow dividend yield will exceed 16% at the bottom in around 2014.

    On the other hand, if all the Dow stocks stop paying dividends, the yield (and probably the P/E ratio) will be infinite.
    Jul 08 00:32 am |Rating: 0 0
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