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We're buying shares in a company who we believe will expand and profit over the long run.



Right. The growth phase I understand, but that's not the platonic ideal. What happens when a company stops growing entirely and makes $100 in profit each year. Let's say there are 10 shares. Is the theoretical value of the share $1 for a P/E to be equal to one? And does that mean therefore that if there's no more growth, all the profits should be paid out to the shareholder?

I think I'm trying to get at the real theoretical here, as I understand all the stuff you mentioned in your reply. I still feel somewhat uncomfortable with understanding what it is that I have when I have a share of a company, since when it's in the market, what I own is potential for profit. But what happens when the potential is over? If the company didn't give the profits to the shareholders, the share would be worthless, wouldn't it?
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