Message Font: Serif | Sans-Serif
No. of Recommendations: 0

I do not really understand why anyone would want to own stock, other than the fact that stock prices rise and you can make a profit that way. But there has to be another reason, e.g. we can earn money on the stock we own. But many companies do not pay dividends, or in many cases a very small amount even though they may be very healthy and profitable businesses.

The intrinsic value of ownership in a company has to be that it will give us something for using our money (such as interest on our money or a sufficient part of the profits, etc).But I don't get much of anything from businesses, for owning their stock.

I guess I'm afraid what is going on is what someone from an investment BBS wrote: "In my opinion, any stock that does not pay dividends and total valuation considerably higher than its book value is bought and sold on the greater fool theory. Each buyer hopes there will be someone more foolish than themselves to unload to."

I would appreciate any information you can give me about this.

Print the post  


What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.