BS Number Wise: Taking stock of Indian markets' valuation premium

Data shows that bond yields here are significantly higher than the earn­ings yield

Professors Benjamin Graham and David Dodd, two of billionaire Warren Buffet’s gurus, noted in 1934 that stock market investors once required a company’s earnings yield to be higher than prevailing bond yields as stocks were considered riskier than bonds.

Investors banked on dividend income then. And this was broadly the equivalent of insisting that you earned more from your dividend than your fixed deposit, because share prices can fall.
 

This approach was already considered old-fashioned when they described it in their seminal work, Security Analysis. Inflation, interest rates, the tumult of the Great Depression, and a world war eventually established