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it should most definitely not be worthless. A company not paying dividends is akin to you investing in your friend’s restaurant, and have your friend tell you

it should most definitely not be worthless. A company not paying dividends is akin to you investing in your friend’s restaurant, and have your friend tell you that by investing you are entitled to a piece of the pie, but the business plan he has in mind is to invest all the profits (if any) for the next 10 years to grow the business and expand to new locations, and just after 10 years start sharing profits or selling it to someone else. In such scenario, is that piece of the pie worthless? I say most definitely not, because, net of risk, the expectation is that your “slice” will end up being more valuable than what you invested in. I ask my question again: what is another investment that doesn’t operate by this basic logic? What is a business where its value is purely and solely based on a hardcoded multiple of current profits, and such multiple cannot go up and down based on how the buyers feel the future growth trajectory will be for such business?

falcolas 7y ago
Frankly, if I'm investing in a friend's company, I would have some control over the terms of the investment (time, interest, order of payback, etc). I might even have some say in the business model. So, I would be an actual investor. In contrast, if I purchase a share of stock in a company, I have no control over that investment. I'm just giving money to somebody, who gave money to somebody else, who purchased stock at an IPO based on other IPO investor's valuation of the company. The actual value of any share of stock is based solely on the mob behavior of the other stock holders based off speculation, rumors, and psychological manipulation. Throw in a few algorithms trained by the human mob mentality as well. The value of the stock is not controlled by the business, not its income, not its revenue, not its business model.
- deanmoriarty 7y ago
  > The value of the stock is not controlled by the business, not its income, not its revenue, not its business model. It absolutely is (modulo risk and short term volatility)! But it’s fine, I’ll agree to disagree at this point. I just hope that you get to invest your savings in something with expected returns as good as the stock market, otherwise I think your opinions are statistically going to cost you A LOT of money.

falcolas 7y ago

Frankly, if I'm investing in a friend's company, I would have some control over the terms of the investment (time, interest, order of payback, etc). I might even have some say in the business model. So, I would be an actual investor. In contrast, if I purchase a share of stock in a company, I have no control over that investment. I'm just giving money to somebody, who gave money to somebody else, who purchased stock at an IPO based on other IPO investor's valuation of the company. The actual value of any share of stock is based solely on the mob behavior of the other stock holders based off speculation, rumors, and psychological manipulation. Throw in a few algorithms trained by the human mob mentality as well. The value of the stock is not controlled by the business, not its income, not its revenue, not its business model.

deanmoriarty 7y ago
> The value of the stock is not controlled by the business, not its income, not its revenue, not its business model. It absolutely is (modulo risk and short term volatility)! But it’s fine, I’ll agree to disagree at this point. I just hope that you get to invest your savings in something with expected returns as good as the stock market, otherwise I think your opinions are statistically going to cost you A LOT of money.