Trendlover,
I am getting really frustrated because I keep telling people that I understand what P is, I understand what E is. But people refuse to acknowledge the fundamental question: HOW DOES THAT TRANSLATE INTO $ for the INVESTOR if it isn't done through D?
I understand how that means the company is worth more though bigger E because it's book value just went higher either through more cash on hand, or more warehouses, or whatever else raise book value. What I am saying is, through what mechanism, does that value get translated into my pocket if it isn't through D?
People keep saying, well the stock price will go up. And I keep saying, WHY? It has to be in anticipation of a higher D? And yet, how many times do you see any of these tech companies have a D, let ALONE raise D? Why does anyone buy a stock simply because a company is worth more to SOMEONE ELSE? Don't you see? The price goes higher simply because someone buys it. The fact that the company had higher earnings is meaningless in the absence of D to the INVESTOR! So itis a ponzy scheme in the absence of D!
Ugh, I need a good example, because I have said this a million times, and I still don't seem to be getting accross that anything that is not a direct payment to me, is a ponzy scheme.
What is comes down to is this. People (investors) think that the company = it's stock price. That is so clearly wrong. To teh investor, the company SHOULD = it's dividend stream. The only other mechanism that makes sense is takeover value, but who is buying AMZN or MSFT or scores of other companies with massive earnings, and almost no dividend?
