Just doodling on the computer, taking a break form "Devil Take the Hindmost"...effing scary, folks.
Just a quick rundown of Dow components and their dividend yields as opposed to 10 yr treasuries>5%
MO 4.15% DD 3.03% UTX 1.1% C 1.1% IBM 0.4 %
JPM 2.73 SBC 2.43% JNJ 1.4 AA 1.4% WMT 0.5%
CAT 2.7 IP 2.58 PG 2.34 DIS 0.6%! HD 0.3%!
GM 3.63 T 0.6%! HON 1.5 HWP 1.1 INTC 0.2%
EK 4.17 MRK 1.7 KO 1.5 AXP 0.7%! MSFT 0%!
MMM 2.02 BA 1.1 GE 1.3 MCD 0.7%! XOM 1.9%
These are supposed to be the cream of American business? Most have pe's over 20, many over 35. Most recent
additions, MSFT (none) and INTC (neglible at o.2 %).
To those recently a comin' visitin' these here parts, I ask you ever so humbly, ( I mean it), can you honestly make
a case for investment in the DOW at these levels, or for that matter, any of the reemerging whipped puppies
in Tech, namely, NT, CSCO, etc?... Am I mistaken in my many years of investing of concluding that the ultimate
value of a stock is its potential for GROWTH "AND" its potential to pay a dividend greater than bonds?
This inquiring mind wants to know of you newcomers who think we old farts (of the thread if not, like me,
in years) are overly cautious, paranoid and cynical of a market STILL at these levels. The DOW is nowhere
near a historic norm of a pe of 12-15 with at least 4.5- 5.5 % dividend yields. As a matter of fact there is not one paying 5%, not one and the closest to 5%, EK (failing business in photography??) and MO (troubled waters
with tobacco legislation ahead, likely all over the world)....ye gods above, the lemmings, the lemmings
jim black |
