Why do stocks have any value?
Going to get flamed for this but looking for actual answers - what actually makes a non-dividend stock worth anything?
Standard answer is you own a piece of the company. Fine. But say I own 1% of a company that never pays a dividend, never does a buyback, never gets acquired. I'm not entitled to a dollar of its cash flows, ever. So what am I actually holding besides something worth whatever the next guy pays for it?
And when a company does pay a dividend, the stock drops by roughly the dividend amount. Left pocket to right pocket. So what even counts as a real return of capital to a shareholder vs. just an accounting reshuffle?
I know the textbook answer is the share = PV of future cash that eventually accrues to you. But for something like AMZN that "eventually" has been theoretical for 25 years. Is the whole thing just a bet that capital comes back someday? Or am I missing a cleaner mechanism?
Why do you brush your teeth everyday? Certainly no short term value but much like reinvestment in ROIC the reinvestment in your health pays dividends in the future
Paying a divy or doing a stock buyback is a choice the Board can make overnight.
Just because you've held on to your house or apartment for 20 years without selling it doesn't mean it's worthless.
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