Registered: Sep 2001
02-14-12 04:56 PM
Another interesting thing to consider is, take the last times the SPX has been at 1350, and normalizing for the dollar (e.g., in gold terms) at each of those times, compare the dividend yield of the SP500 is at each of these times. I suspect that even if they are raised, normalized in gold terms the current DY is pathetic.
In addition, the spread between the five year note (and maybe other terms) should also be compared to DYs at each historical data point. This may be the true metric by which companies pay out, not in absolute terms, but in relation to bond yields - companies sell corporate bonds (which are in competition from the government also trying to borrow money) to borrow money, and then use that money to leverage profits from the business, some of which gets turned into a dividend.