Lets see, now that I have a bit more time...
Examination of models and papers put forth by Siegel, Fama and French, Schiller and others.
Bottom line conclusions:
"Fama, French and most other scholars agree with the following points: (1) market returns in the last half of the 20th century, especially returns in the 1980s and 1990s, were better than expected because market multiples rose unexpectedly
; (2) a substantial decrease in the equity risk premium is largely responsible for the sharp rise in market multiples. As we shall see, a decrease in the equity risk premium has implications for future stock returns."
"The decrease in the payout ratio increases the dividends multiple to 23.8, but the equilibrium stock price and earnings multiple are not affected.
"Let us look at the implications of these examples. Fischer Black (1976) reviews dividend policy and concludes that theory provides no help in determining why firms pay dividends or in determining the marketís optimal dividend payout policy. Historically, the marketís dividend payout ratio has declined sharply and unexpectedly since the early 1980s. Both theory and history suggest that the marketís dividend payout ratio is unstable. An unstable payout ratio implies an unstable dividends multiple, which implies the dividends model is invalid
"Fama and French (2001) predict that the future dividend growth rate will repeat a historic average; they do not project faster growth due to todayís low dividend payout ratio.
In other words, the primary driver of the earnings increase you've noted is an increase in market multiples, and not having anything to do with dividends. In fact, this range of scholars appears to find no correlation whatsoever between dividend payouts and stock prices.
Originally Posted by 3 Yrs to Go
Dude, you can quote yourself all you want and pretend it says something it doesn't . . . or you could simply say "I was wrong."
Will you be following your own advice at this juncture?