Figure it out..... - Monday, page-29

Martis, with the greatest of respect, people wont stop eating food, or brushing their teeth, or servicing cars or drinking coca cola, regardless of how dreadful conditions might be. Life doesnt just stop because the world is in depression, if thats where you think its going.
IMO, Quality is a bunch of shares that still sell a product of necessity. BTW, Im not a fan of gold....it gives me NOTHING for the time spent owning it. In fact it has one of the weakest inverse correlations to deflation of any asset class I know of.

Re equity yields, I'm not sure you understand what I'm saying. If I am BHP, and I have a AAA credit rating, should I print more shares to pay a high comparative yield IN EXCESS of what I may be earning, in order to protect my share price, OR should I borrow shed loads of money at 2.5% to fund my dividend yields. Answer: Right now, the cost of equity is very high because share prices are low, so I'm better off borrowing the money at these knock down prices to continue to fund the divy. I just keep doing this, because eventually, commodity prices improve, my share price improves and I can reduce my divy and use excess funds to pay for the debt I accumulated at 2.5%. The reason BHP, Coca cola, Unilever etc can do this is because they have AAA credit ratings.
And that, my friend, is why the yields on Equity will not drop, for the largest companies with AAA credit rating at least, and why, therefore, the index is not headed for 1000