"Share traders" and "punters" do buy stocks because they think they'll go up, true investors (who are the bedrock of a share price) buy stock that will pay a dividend - a return on their investment. WRONG: I AM BOTH A TRADER AND INVESTOR AND I HAVE HAD PLENTY OF RETURNS ON SHARES THAT PAY NO DIVIDEND IN FACT THE VAST MAJORITY... As the earnings and dividends go up so to does the share price of course (people will pay more the more a share earns.WRONG: SP GOES UP BECAUSE OF INCREASE IN EARNINGS OR POTENTIAL FUTURE EARNINGS PLUS OTHER REASONS (PUSH INDICATORS)DIVIDEND IS A SEPARATE ISSUE (NO PUN INTENDED)A COMPANY COULD HAVE NO PROFIT, SELL AN ASSET AND PAY A DIVIDEND TO SHAREHOLDERS (GOD FORBID)
If there's anyone here that doesnt understand this or believe this you need to reevaluate what you think underpins share price and share value.
THERE ARE PLENTY HERE WHO UNDERSTAND WHO ARE FAR FAR CLEVERER THAN I.
Why would a share price improve if its never going to pay a dividend? EXPLAINED ABOVE.Who would buy a share that has no prospects of paying a return per share? THE RETURN CAN BE SHARE PRICE INCREASE.
$20b in revenue and $10b in profit means NOTHING if it isn't paid back to the share holder - TRUE: PAID BACK TO SHAREHOLDER THROUGH SHARE APPRECIATION...if you refuse this you have a fundamental lack of understanding about investing!!
Who goes out and spend $10k KNOWING they will never see a cent in return - PLENTY OF BILLIONAIRES DELIBERATELY AND ME ACCIDENTALLY... just put your money in the bank and earn 5% - its a better investment! HOPE THIS HELPS.
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