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  • 13 Safe Stocks in a Return to the 1970s [View article]
    Great article.

    I suspect I may be a bit younger than your Dad, but I do remember the notion of "risk premium" that has been rendered quaint in the era of the Great Bubbles. This states that since stocks had higher risk than bonds, their return based on their earnings, of which a reasonable proportion was expected to be paid out as dividends, should exceed that of bonds.

    In the era of the Great Bubbles, the notion of "risk premium" was replaced by the notion of the "greater fool", i.e., that someone will always be willing to pay you more for a stock, even if its earnings are miniscule and its dividend is nil. After all they say that "a sucker is born every day".

    I agree that quaint notions like "risk premium" are back in vogue, as we are running out of "greater fools".
    Feb 24 12:33 PM | 2 Likes Like |Link to Comment
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