[spinchange]

He was comparing the point value of an index at two points to the /nominal/ dollar value of GDP at the same interval. That firms in the Dow in returned a lot of capital to shareholders in the form of dividends doesn't mean the market value of their equity increased any during the period. You're mixing capital returns with capital appreciation which isn't what he said at all. What he said was completely accurate. I think he knows what it was like to have lived and invested through the period.

[nonethewiser]

> Or, if we look at another measure, the sales of the FORTUNE 500 (a changing mix of companies, of course) more than sextupled

Paying out a dividend devalues a company by the same amount it benefits the shareholders. So evaluating neither the appreciation nor the return make any sense without factoring in the dividend.

[spinchange]

In theory, yes, but in practice market premiums are variable and greater than book values. It is true that dividend paying stocks fall somewhat on their ex-date. If they're undergoing capital appreciation too, that's generally made up for in short order.

I'm not saying to disregard dividends in terms of total return, either, only that Buffett wasn't talking about total return, so the "well, actually" I was responding to was just off the mark. If you or me were alive then and/or aware enough to watch the DJIA (classically in the 20th century, many American's measure of "the market" even if not technically the case) things really would have looked like they went nowhere (nominally) from the middle 60s until the early 80s.