According to statistical models evaluating price-to-earnings ratios, we’re still in the middle of the latest stock market bubble.

That’s pretty sobering.

But, maybe it’s good for the long haul. I heard an interview on PRI a couple of weeks ago with an author who argues that the stock market is really just one big Ponzi scheme. You’re buying a stock, hoping it will go up, and then hoping to sell it to the next person who’s decided to jump in. There’s certainly an air of validity to that perspective.

Once upon a time, you invested (bought stock) in a company because it was well run and paid a regular dividend. The money the company paid you made your investment worthwhile. Your dividend yield would often exceed other forms of investment like savings accounts or CDs. But, over the past generation, we’ve gotten away from the dividend model. Now, we just buy a stock hoping that it will go up as other people buy the same stock. Perhaps we should go back to the dividend model.

I don’t see this as a repudiation of capitalism, just a repudiation of shortsighted investing.