Comment Re: Dividends (Score 1) 335
Why is that dumb? That's true of ANY asset.
Not true. My car has tangible value. My house has tangible value. My furniture has tangible value. My stocks do not have tangible value except for the dividends they pay me. Cash is the only value I receive from a stock, and if its not coming from the company, the company is not actually creating value for me. The value becomes more like a collectable.
In fact even if they are paying a dividend all the company is doing is transferring money to you that you already own as a shareholder.
Cash can buy me tangible value. I have to trade stocks for cash before they can be used to buy tangible value.
A dividend pay out implies that the company does not believe that it has investment opportunities available to it that would outperform those available to the shareholder.
That implies that stock value is directly related to the real value of a company. It is not. As a former 3D FX shareholder, I can guarantee you it is not.