Is Stock Worth Anything ?

E

eves_banished_children

To the individual investor, I mean.

Yes, it has a theoretical worth, a percentage of the corporation, but if it is an individual investor who owns 0.000000005% of the corporation, and the investor is not teamed up with other investors to have an influential voting role in the corporation, do they really own anything ?

It isn't like they can walk into the corporation and start making demands for a company car in exchange for their shares, or have any role in the corporation what-so-ever. They have no real voting power, they don't sit on the board, at this point they don't even have a paper certificate, they are just a blip on a monitor somewhere.

Beyond their meager hopes to sell to a greater fool, do individual investors actually own anything when they "own" stock ?

Does stock have any actual intrinsic value for an individual investor ?
 
If you’re asking is the stock worth anything technically there’s a book value to that stock if it were liquidated today. Also it gives the opportunity of future cash flow, through dividends or capital appreciation. Certainly a profitable company is worth more than it’s book value. For example we can’t go into an individually owned profitable business and expect someone to sell it to us for book value, certainly future cash flow has got to be considered into the equation. So essentially a stock is worth book value plus claim to a portion of future cash flows. This is what the market needs to decide, not saying that I agree with all the prices but it is what it is.
 
FXbeachbum said:
If you’re asking is the stock worth anything technically there’s a book value to that stock if it were liquidated today. Also it gives the opportunity of future cash flow, through dividends or capital appreciation. Certainly a profitable company is worth more than it’s book value. For example we can’t go into an individually owned profitable business and expect someone to sell it to us for book value, certainly future cash flow has got to be considered into the equation. So essentially a stock is worth book value plus claim to a portion of future cash flows. This is what the market needs to decide, not saying that I agree with all the prices but it is what it is.
More...

Yes and I know all of that, of course, but I'm talking about actual intrinsic value to an individual investor, not a theoretical, political, or philosophical kind of value. Given what you said, is THAT any value to an individual investor ? It helps them to prove to the greater fool that they should buy the stock from them, but what else does it get them on a given Tuesday ? The only time book value ever has any actual intrinsic value to an investor is upon bankruptcy, as a practical matter, when everyone is arguing over who owns the waste paper basket in the bathroom after the creditors have taken everything else.

It makes me think about deeds to land on planets circling other stars .. yes, if it were internationally recognized (which they aren't) they would have some theoretical value, but what actual value are they to someone who has absolutely no way to get there, no way to influence what happens there, no way to exploit any gain there, etc ? Stock in corporations seem similar, a kind of totem or fetish, but what actual value do they have to individual investors ?

For the individual investor, 1000 shares of a company and 2.99$us will get them a cup of coffee at the corporation's campus coffee shop (assuming security even lets them on the campus), but what value are the shares alone ?
 
Last edited:
Well if you’re going to look at it in that perspective, perhaps not. From a cynical or realistic point of view we can just call it what it is just a method of wealth accumulation or transfer.
 
You mentioned that you can't walk in to the business and demand your money. This is true, but you can just sell your shares on the market which I'd argue is a lot more convenient.
 
Of course a stock has a value if you hold it as ownership. You may not be able to control the company operations but you are entitled to your share of earnings of the company.

One way to look at it is: warren buffets public holdings. He doesn’t get involved (though he could) and he gets dividends based on the company’s earnings.

Another way to looking at it is investing in a friends business. You don’t get to tell him what to do but he will owe you a percentage of the earnings and that is very real.

If you actively trade then a stock is nothing more than a piece of paper.
 
eves_banished_children said:
To the individual investor, I mean.

Yes, it has a theoretical worth, a percentage of the corporation, but if it is an individual investor who owns 0.000000005% of the corporation, and the investor is not teamed up with other investors to have an influential voting role in the corporation, do they really own anything ?

It isn't like they can walk into the corporation and start making demands for a company car in exchange for their shares, or have any role in the corporation what-so-ever. They have no real voting power, they don't sit on the board, at this point they don't even have a paper certificate, they are just a blip on a monitor somewhere.

Beyond their meager hopes to sell to a greater fool, do individual investors actually own anything when they "own" stock ?

Does stock have any actual intrinsic value for an individual investor ?
More...

yes. you are a silent partner and benefit as the business becomes more successful.
 
Last edited:
zdreg said:
yes. you are a silent partner and benefit as the business becomes more successful.
More...

Even more: as a stockholder, you are (let's remember) an owner. This gives you legal standing, should you wish to sue, etc etc etc.

It's *worth* to you can be summarized (but not detailed) by the price at which you hold it.
 
You must log in or register to reply here.
Back
Top