The Cognitive Dissonance of Equity Investors

The equity risk premium for bringing growth and excess returns is close to about 4.4%, but I'd like it to be five or six, absolutely. At 4.4% you're earning a higher equity risk premium than the average premium over the last 60 years. If you get over exuberant and you push up stock prices, well above where they should be, my measure of the equity risk premium will go down because the price will go up. It's like a yield to maturity for stocks.