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OK, since you ask, everybody's favorite, the NASDAQ. Because of
cap-weighting, what you really mean is the top 100 (not the OEX,
which they're now too embarrased to cap weight). Total
capitalization is $2.6 trillion; total revenues are $103 billion,
earnings are $35 billion, and dividends are negligible. Let
us postulate that GDP grows at 5% because while all non-DAQ100 stocks
do not grow much, the DAQ100 grows at 25% per year, at least
until its revenues represent 90% of the slow-growing GDP (leaving
a sliver of room for the government and those nasty, non-OEX
companies). Dividends now are negligible, but after the
high-growth period ends, they are upped to 50% of earnings.
Expected rate of return in this, er, mildly bullish scenario?
A fat 10.7%. Boy, BGR, you're right -- the equity premium is
alive and well. <cough.. cough.. ackpht> -g- -mb |
