How are stocks without dividends worth anything at all?

The problem with that is it assumes you can successfully buy near the bottom and sell near the top. The real value of a dividend stock for traders is it flattens out the price trend and essentially forces you to ladder a bunch of mini sell orders in the form of dividends.

If you buy a non-dividend stock you need to successfully buy near the bottom and sell near the top to maximize trade value.

If you buy a dividend stock then as long as you buy near the bottom you can miss the top by a significant margin and still close the trade in good shape, because you've been laddering small sums of money out of the trade the whole time.

Theoretically, if the company closed today, all assets of the company would be distributed among shareholders. The more shares you have, the more you get. So it is worth something.
The book value is usually way lower than the price, so yes there is a risk if everything collapses. But the market assumes that things will do well in the future, and bases the price based on expected future growth.

if there's no dividends that means they have more cash on hand to reinvest in the company, buyback stock, or simply hold for future needs.

pic related

Incorrect, watch the video I posted. Fama, French, Shiller, Modigliani etc have already covered this topic. Look up their work.

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its a simple question. answer it. shouldn't take much thought. If you want to act like you're smart by complicating the question by adding a lot of bullshit then i can do the same. Let's say even if i gave you the statement of cash flows and balance sheet of this very simple, very made up company, how can you know if paying a dividend is worth it without knowing the opportunity cost of that dividend? Maybe its more worth while to spend that money on R&D and develope a new groundbreaking product for the company that will pull in huge profits. When are those cash flows expected to come in? what is the pv of that money? Fuck man, you dodged the question because you don't know the answer. pathetic.

>pause attack on titan to watch this trading video

I'll bookmark it for later, eren is more important right now. My gut says in right but it might just be my own risk tolerance talking for me.

It's just a video explaining that a company's dividend policy should not matter. At least read the screenshot. And it has nothing to do with risk either, it simply does not reflect a company's performance.

>Theoretically, if the company closed today, all assets of the company would be distributed among shareholders.

ok that makes sense. I was also thinking that maybe stockholders will HOPE that a company will someday start paying out dividends in the future, and will value the company based on that speculation.

I understand now about sharebuy backs and how this "increases" the "value" of outstanding shares because there are less of them presumably, as claims on the same bigness of "company", but I still don't see what that value is based on, given that I don't get anything from owning a stock unless it has a dividend.

If I own enough stock, I could get a say in how a company is run, so some whale might be willing to come in and buy my stock (making it valuable) but I don't hear about this happening very often especially with the "common shares" available to the public.

Bonds I can understand really well. I give company money for a loan, and they pay it back over time with interest. Much easier to grok so maybe I'm a bond guy.

You wouldn't pay out dividends unless your company was profitable though, and that profitability builds up over time. So the stock price is free to go up and down based on market fundamentals, but would have a bias toward trading sideways. In the current paradigm, the bias is always inflationary which has created a lot of problems in the business cycle.

It so happens that large and profitable companies tend to pay out dividends, but the fact that they do and what their specific policy about payout is doesn't matter for returns.

This policy shouldn't be a factor in determining what you invest in, if you need income just sell some of your shares.

wrong. equity almost always gets wiped out in the event of a bankruptcy. the ladder of seniority is

Common Stock
Preferred stock
Unsecured Debt
Secured Debt

With secured debt being the safest (meaning a judge will order proceeds towards those obligations first). Also, note there are many levels of debt, including secured, and unsecured (things can be even senior secured). The actual meaning of these words only has context in terms of the subordination structure of the company and its parents/children. Lawyers spend lots of time on this

because if you bought apple in 2002, and held to today, well sales of apple products have increased 100 times, and that value has to be stored somewhere.
no one hopes for a company to go out of business, because that means the profit train stopped. otherwise there's no reason for it to shut down.

also companies routinely sell shares, or print more shares and sell them to investors. They do this so they can hire more people, build production plants, etc. You can read quarterly report 10Qs for proof of this.

Companies are about providing a service and tacking on an extra fee to give to themselves. Shareholders are the middlemen that benefit from every transaction.

There's also a little game theory going on to drive up price. If no one buys a stock and it's only $0.0001, but the company is worth $1 billion in assets. You can buy the company for $5, have a controlling vote, and decide to sell off the assets, and net a few million for yourself.

it's not a perfectly rational system, but its good enough.

>if you need income just sell some of your shares.
selling shares depletes your capital, and you will run out eventually.
spending dividends does not deplete your capital, and can theoretically be done forever.

So what is the point of owning the stock then if not for income?

If you do not tely on dividends you will need to rely on buying and selling, which you will need to time properly, buying low and selling high. More short term potential supposedly ... But long term?

do i spot a corn cube?

>So what is the point of owning the stock then if not for income?

No one could be this stupid.

same thing as in crypto, market scarcity, div stocks are best if hey're healthy
this is true for a lot of stocks the last 20 years
look at shares outstanding or the stock float, tilray locks up Thiels stock and they shoot higher than any other weed stock, Tesla 200 million shares, GM and Ford billions each
theres a bunch of good ways to value stocks but they're only one way of viewing them
Board of directors bonuses will bleed them dry before they crash it

I agree with OP, I make more money off of REIT's and whole life insurance.
My REITS pay 5-8% yearly, whole life around 4-6% better than most div stocks
Dividends from REIT's, life insurance and stocks all receive better tax rates than capital gains, even long term

>No one could be this stupid.
answer the question then smart guy. I couldn't which is why I made this thread.

One of the big problems with dividends is that investors will buy stocks just before dividends pay out and then dump that same stock as soon as they've got the dividends, thus fucking with the market value, not paying out dividends therefore encourages long-term investment in a company, that's apparently why Berkshire Hathaway doesn't pay dividends

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>investors will buy stocks just before dividends pay out
doesn't seem like a problem to me. If some shmuck wants to sell their dividend paying stock just before they get a payout, that's their business.

Used to be about markets but now it's a way to get access to inflation.

You get to buy it and dump it on someone more retarded than yourself. A lot of stocks will pump just because they are pumping in a self fufilling prophecy, if enough people see a bullish chart pattern they will all pile in and pump the price. Your role is to figure out how long to ride the scam wave. 20 percent profit is usually enough for me on the scam wave stocks.

Selling your stock just before dividends pays doesn't make you a shmuck, dividend-paying stock usually pump in value immediately prior to dividend payments so that's often the best time to dump any stock that you want to get rid of, even if that means not getting dividends on that stock. You seem to be massively overestimating the profitability of dividends compared to just trading stocks for a profit

This
Most stocks pay a pittance for a dividend

are all stock trades into fiat taxed at capital gains?

>so what's the actual benefit to owning them?
utility value of cash flow without the sale of the underlying asset.

i use dividends to pay unexpected expenses on my rental property and to buy options.

the market already accounts for this. on dividend day the stock normally drops the amount of the dividend.
Only people with light speed access to the market are able to sell on the open of dividend day and avoid the loss

no, if you don't hold an asset for 2 years its taxed as income.

stocks are voting rights.
They have a value and they can be speculated on when there is more demand for voting rights in a company.
The stock market in modern society function as another form of wealth extraction.
You can price anything that maintains value in usd and it will go up. The stock market is a ponzi scheme

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>investing through whole life insurance and thinking it's a good idea

wow.

>they scalp dividend stocks
I respect it

it is with a lot of money or if you start early, the gains average higher than the S&P.
I needed something not correlated to my stocks. Plus the dividends are double Starbucks, Coke, McDonalds, etc in yearly yield.

Why do you think it's not a good idea and where should I put my money instead?

Stocks are a scam because of the huge premium due to being public.

>buy small business
>pay 3-4 times earnings
>take profits

Or

>buy stock
>pay 15-20 times earnings
>what? Dividends are irrelevant

Inb4 “muh growth stock”

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you mean to tell me that your whole life insurance returns are better than 11-12% annualized on average?

that's not how whole life insurance companies make their money off you.

i think you're getting some bad information here.

anyway all you fags can split the difference with SPHD or SPYD, i hold both.

tons of stocks didn't start out paying a dividend

it's a bet on growth that will lead to greater profits in the future and exo facto greater+safer dividend payments in the future

So I am that stupid. What is the answer then?

That is why you hold... That is the whole fucking point of buying dividend stocks... You hold long term, thus it becomes irrelevant to some extent what the share price is.... Otherwise you could just buy and sell any stock, and this would not even be worth debating. That is the whole premise behind this entire thread.

Otherwise if a stock pays no dividend, the only way to realize your gains is by selling, and if you do, better hope the price is higher than when you bought in.

Value is based on more than just net worth.