Is Stock Worth Anything ?

[stockmarketbeginner]

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 ?

I think you are asking this: Does a share of stock have a nominal value, like a currency. For example, independent of the current selling price of a share on the open market, can you go sell the paper asset of the stock for 25 cents or something like that. So if the stock sells for $100 per share on the open market, that would not be a good trade in. But if the stock goes to zero, you can trade in your share of the stock for its 25 cent paper value. It is sort of like if you own a silver dollar. If the price of silver goes to zero, the coin is still worth a dollar as actual U.S. currency. So you can still go buy a pack of gum with your silver dollar, because it has a currency value of one dollar.

I'm pretty sure this is the question being asked. People on this site can answer this question much better than I can. My understanding is that stock shares may have a very low paper value (like a penny or a fraction of a penny) so they fulfill some sort of technical requirement.

People here can answer better. But I believe the original question is the "silver dollar" question. Besides the value of the silver (i.e. the current open market value of one ounce of silver)... does it have a stated redemption value (a silver dollar can still be used to purchase one dollar of goods irrespective of the current commodity value of silver).

 

[eves_banished_children]

I think you are asking this: Does a share of stock have a nominal value, like a currency. For example, independent of the current selling price of a share on the open market, can you go sell the paper asset of the stock for 25 cents or something like that. So if the stock sells for $100 per share on the open market, that would not be a good trade in. But if the stock goes to zero, you can trade in your share of the stock for its 25 cent paper value. It is sort of like if you own a silver dollar. If the price of silver goes to zero, the coin is still worth a dollar as actual U.S. currency. So you can still go buy a pack of gum with your silver dollar, because it has a currency value of one dollar.

I'm pretty sure this is the question being asked. People on this site can answer this question much better than I can. My understanding is that stock shares may have a very low paper value (like a penny or a fraction of a penny) so they fulfill some sort of technical requirement.

People here can answer better. But I believe the original question is the "silver dollar" question. Besides the value of the silver (i.e. the current open market value of one ounce of silver)... does it have a stated redemption value (a silver dollar can still be used to purchase one dollar of goods irrespective of the current commodity value of silver).

Sort of.

What I'm really getting at is that most other investments DO have some kind of intrinsic value.

1) Life insurance, term or whole, if I die people get money. It is a practical thing that has actual value in my life.
2) Collectibles, art, cars, etc, you can hold them, enjoy them, they are things, people appreciate them.
3) Bonds, they pay out money, they have a finite lifetime where the principle is repaid, you are a creditor in line for money before the owners, etc.
4) Precious metals, the metals have intrinsic value apart from what the market will pay for them, they are used in manufacturing, and as you (stockmarketbeginner) say they have currency value apart from their market value.
5) Cash, in all its forms, can buy you something at the store, it is illusory in the sense that it is an agreed upon medium of exchange with no actual intrinsic value, but it can be immediately used to get something with intrinsic value.
6) Commodities, are literally "stuff", oil, wheat, etc.
7) Futures for commodities, become commodities.
8) Options for futures, become futures, which become the underlying. These are all of value, have actual practical value because they benefit the person who bought them, directly, in a practical, tangible way.
10) Real estate, you can live in it, rent it out, it can be income, it is a thing with intrinsic value.
11) Reits produce income
12) Treasuries, see bonds and cash

Etc, etc ...

And I can understand dividend paying stocks for as long as they pay dividends, they are income producing, I can see how that has actual value to a person who buys them.

But for the individual investor, beyond a medium of trade (greater fool as I said above), what actual value does a stock that doesn't pay a dividend have to an individual investor ? It doesn't produce income, they can't hold it, it has no actual intrinsic value (at least not in any sense that benefits the individual investor), they can't spend it at a store, they can't take delivery on products created by the company with it, they can't exercise it to get a commodity of any kind, they can't live in it ... it's just ownership in something they have no actual control of, and will never have any control over. They can't force the company to pay a dividend, they don't get to drive the company car, nothing. Owning stock in a non-dividend paying company is like holding stock in someone else's bank account ... except they get to decide how the money is spent (up to and including every last dime) without your say so, they can even bankrupt the account if they want to and there's nothing you can do about it, they get to benefit from the money in the account in the sense that they can buy cars with it, etc, and yes, you own some part of that car, but you'll never get to drive it, etc. You basically sit as a passive observer claiming you "own" something without a single benefit of actually owning anything.

 

[Nine_Ender]

Sort of.

What I'm really getting at is that most other investments DO have some kind of intrinsic value.

1) Life insurance, term or whole, if I die people get money. It is a practical thing that has actual value in my life.
2) Collectibles, art, cars, etc, you can hold them, enjoy them, they are things, people appreciate them.
3) Bonds, they pay out money, they have a finite lifetime where the principle is repaid, you are a creditor in line for money before the owners, etc.
4) Precious metals, the metals have intrinsic value apart from what the market will pay for them, they are used in manufacturing, and as you (stockmarketbeginner) say they have currency value apart from their market value.
5) Cash, in all its forms, can buy you something at the store, it is illusory in the sense that it is an agreed upon medium of exchange with no actual intrinsic value, but it can be immediately used to get something with intrinsic value.
6) Commodities, are literally "stuff", oil, wheat, etc.
7) Futures for commodities, become commodities.
8) Options for futures, become futures, which become the underlying. These are all of value, have actual practical value because they benefit the person who bought them, directly, in a practical, tangible way.
10) Real estate, you can live in it, rent it out, it can be income, it is a thing with intrinsic value.
11) Reits produce income
12) Treasuries, see bonds and cash

Etc, etc ...

And I can understand dividend paying stocks for as long as they pay dividends, they are income producing, I can see how that has actual value to a person who buys them.

But for the individual investor, beyond a medium of trade (greater fool as I said above), what actual value does a stock that doesn't pay a dividend have to an individual investor ? It doesn't produce income, they can't hold it, it has no actual intrinsic value (at least not in any sense that benefits the individual investor), they can't spend it at a store, they can't take delivery on products created by the company with it, they can't exercise it to get a commodity of any kind, they can't live in it ... it's just ownership in something they have no actual control of, and will never have any control over. They can't force the company to pay a dividend, they don't get to drive the company car, nothing. Owning stock in a non-dividend paying company is like holding stock in someone else's bank account ... except they get to decide how the money is spent (up to and including every last dime) without your say so, they can even bankrupt the account if they want to and there's nothing you can do about it, they get to benefit from the money in the account in the sense that they can buy cars with it, etc, and yes, you own some part of that car, but you'll never get to drive it, etc. You basically sit as a passive observer claiming you "own" something without a single benefit of actually owning anything.

Your whole premise is deeply flawed.

 

[eves_banished_children]

Your whole premise is deeply flawed.

Because you say so ? Hardly. I think you'll find that if you do a search on this topic .. as I have done in the past two hours ... you'll find that none other than Warren Buffett is in agreement with me. And he's not the only one, there are a number of people who think individual investors are basically patsy's or bag holders for owning stock since they don't have the kind of leverage that a Warren Buffett or other large shareholder have.

I'm apparently not the only person who has ever wondered this ... there are others who are out there saying that beyond the ability of a shareholder to sell shares at a higher price, there may be no benefit to owning stock for individual investors.

In your own life, would you buy a company's stock if you knew it's price wouldn't increase and that it wouldn't pay a dime in dividends ? If stock has so much intrinsic value .. what is that value then ???? What possible good would it do you to own shares in a company that wasn't appreciating in price and did not pay a dividend ?

 

[vanzandt]

Because you say so ? Hardly. I think you'll find that if you do a search on this topic .. as I have done in the past two hours ... you'll find that none other than Warren Buffett is in agreement with me. And he's not the only one, there are a number of people who think individual investors are basically patsy's or bag holders for owning stock since they don't have the kind of leverage that a Warren Buffett or other large shareholder have.

I'm apparently not the only person who has ever wondered this ... there are others who are out there saying that beyond the ability of a shareholder to sell shares at a higher price, there may be no benefit to owning stock for individual investors.

In your own life, would you buy a company's stock if you knew it's price wouldn't increase and that it wouldn't pay a dime in dividends ? If stock has so much intrinsic value .. what is that value then ???? What possible good would it do you to own shares in a company that wasn't appreciating in price and did not pay a dividend ?

They used to be pretty cool to look at. https://www.ebay.com/bhp/stock-certificate
https://www.ebay.com/bhp/stock-certificate

Not sure why Standard Oil has a naked Sean Hannity lookin' dude on it though.

 

[elitenapper]

They used to be pretty cool to look at.
https://www.ebay.com/bhp/stock-certificate

View attachment 186275 View attachment 186276

Not sure why Standard Oil has a naked Sean Hannity lookin' dude on it though.

Might be worthwhile to collect some well-preserved rare certs at low prices. Gold and Silver coins (genuine, important!) are worth considering IMHO. Anything but the Federal Reserve notes.

 

[Muffhands]

Because you say so ? Hardly. I think you'll find that if you do a search on this topic .. as I have done in the past two hours ... you'll find that none other than Warren Buffett is in agreement with me. And he's not the only one, there are a number of people who think individual investors are basically patsy's or bag holders for owning stock since they don't have the kind of leverage that a Warren Buffett or other large shareholder have.

I'm apparently not the only person who has ever wondered this ... there are others who are out there saying that beyond the ability of a shareholder to sell shares at a higher price, there may be no benefit to owning stock for individual investors.

In your own life, would you buy a company's stock if you knew it's price wouldn't increase and that it wouldn't pay a dime in dividends ? If stock has so much intrinsic value .. what is that value then ???? What possible good would it do you to own shares in a company that wasn't appreciating in price and did not pay a dividend ?

No because clearly the entire trillion dollar stock market disagrees woth you. Investors value shares of stock for a reason. Many reasons. If they did not have any intrinsic value, they would not be worth much if any. Just go back to the basics for Christ sake. Companies issue shares to raise funds in exchange for ownership stake in their business its very simple. The intrinsic value is the business, everything it owns, business model and earnings/future potential earnings. You are seriously over thinking this and it’s far from owning land on another planet lmao. Using your logic nothing in the world would have value unless u can hold it, fondle it, or tell it what to do.

 

[stockmarketbeginner]

Sort of.

What I'm really getting at is that most other investments DO have some kind of intrinsic value.

1) Life insurance, term or whole, if I die people get money. It is a practical thing that has actual value in my life.
2) Collectibles, art, cars, etc, you can hold them, enjoy them, they are things, people appreciate them.
3) Bonds, they pay out money, they have a finite lifetime where the principle is repaid, you are a creditor in line for money before the owners, etc.
4) Precious metals, the metals have intrinsic value apart from what the market will pay for them, they are used in manufacturing, and as you (stockmarketbeginner) say they have currency value apart from their market value.
5) Cash, in all its forms, can buy you something at the store, it is illusory in the sense that it is an agreed upon medium of exchange with no actual intrinsic value, but it can be immediately used to get something with intrinsic value.
6) Commodities, are literally "stuff", oil, wheat, etc.
7) Futures for commodities, become commodities.
8) Options for futures, become futures, which become the underlying. These are all of value, have actual practical value because they benefit the person who bought them, directly, in a practical, tangible way.
10) Real estate, you can live in it, rent it out, it can be income, it is a thing with intrinsic value.
11) Reits produce income
12) Treasuries, see bonds and cash

Etc, etc ...

And I can understand dividend paying stocks for as long as they pay dividends, they are income producing, I can see how that has actual value to a person who buys them.

But for the individual investor, beyond a medium of trade (greater fool as I said above), what actual value does a stock that doesn't pay a dividend have to an individual investor ? It doesn't produce income, they can't hold it, it has no actual intrinsic value (at least not in any sense that benefits the individual investor), they can't spend it at a store, they can't take delivery on products created by the company with it, they can't exercise it to get a commodity of any kind, they can't live in it ... it's just ownership in something they have no actual control of, and will never have any control over. They can't force the company to pay a dividend, they don't get to drive the company car, nothing. Owning stock in a non-dividend paying company is like holding stock in someone else's bank account ... except they get to decide how the money is spent (up to and including every last dime) without your say so, they can even bankrupt the account if they want to and there's nothing you can do about it, they get to benefit from the money in the account in the sense that they can buy cars with it, etc, and yes, you own some part of that car, but you'll never get to drive it, etc. You basically sit as a passive observer claiming you "own" something without a single benefit of actually owning anything.

I see. I believe you are looking for "salvage value". If the company folded, you would own your fair share of the assets that are left over, after bondholders and other people in front of you get paid off first. So if there is a company like "Shoes World", there could be a lot of shoes that are worth something and can be sold at auction. If it is a start-up tech company that went nowhere, they probably have nothing left except a few office chairs and a computer or two.

There is a way to calculate the "intrinsic value" of a company. But that usually makes accommodations for future cash flows, and assumes the company is a "going concern" (meaning it is assumed to say in business into the far future). Salvage value is what is left over if the company completely shuts down and is being sold for parts. Some activist investors buy entire companies with the intention of shutting them down. There is something in the raw parts that is more valuable to them than the business itself. But that is not a very common event.

 

[eves_banished_children]

I'll stop pressing the point, because few seem to have the imagination to "get it", and leave with this one question ..

If a stock is not appreciating (the company is not growing) and the company is not paying a dividend (and no future intention of paying a dividend) on their stock ... what possible value is that stock to any individual investor ?

I posit that the only value a non-dividend paying stock is to an investor is as a means of "trading" over some kind of time horizon.

 

[sss12]

I'll stop pressing the point, because few seem to have the imagination to "get it", and leave with this one question ..

If a stock is not appreciating (the company is not growing) and the company is not paying a dividend (and no future intention of paying a dividend) on their stock ... what possible value is that stock to any individual investor ?

Then sell the damn thing ! (Or don't buy it). It is not too complicated.
That is why it is referred to as a stock MARKET !