Guest Post by Benjamin Strong: Stock Market Valuation/Atlantic Monthly Catastrophic FAIL Department

A guest post by the late Benjamin Strong (1872-1928), sometime president of the Federal Reserve Bank of New York:

Back when I was alive, it was taken for granted that there was an equity return premium: that investments in stocks would, on average and over time, have significantly higher retuns than investments in bonds. You could see this by comparing the coupon yields of bonds with the earnings per share of stocks: earnings per share were higher.

Admittedly, only some of those earnings...