Why are stocks worth anything? (particularly ones that don’t pay dividend)
As a shareholder you are a part owner of the company and are entitled to what an owner would be entitled to(profits from the company). In the short term the company may not have profits, or wants to grow the business so the Board of Directors(elected by the Shareholders)decides to reinvest the pr…
The Short Answer
As a shareholder you are a part owner of the company and are entitled to what an owner would be entitled to(profits from the company). In the short term the company may not have profits, or wants to grow the business so the Board of Directors(elected by the Shareholders)decides to reinvest the profits instead. In the long term, the goal whether you're .00001% owner or 100% owner is to grow the company to a degree that you can pocket the profit. Also the shares themselves change value. As late as 2001 you could Apple shares for under 15 bucks. By 2011 they were over 400 dollars a share. A 40,000 dollar investment back then would make you a millionaire just in the value of the shares not to mention the 17,000 plus a year you'd be collecting in dividends. They've since done a stock split so their share price is much lower, but you'd have more of them.
Analysis
Key Concepts: Owner, company, profits
This explanation focuses on owner, company, profits and spans 153 words across 8 sentences. At 113% above the average Society explanation (72 words), this is one of the more thorough answers in this category, reflecting the complexity of the underlying question.
What This Answer Covers
The explanation opens with: “As a shareholder you are a part owner of the company and are entitled to what an owner would be entitled to(profits from” It then elaborates by presenting a contrasting perspective, ultimately building toward a complete picture across 8 connected points.
How This Compares in Society
Ranked #32 of 500 Society questions by answer depth (top 7%). This places it in the comprehensive tier — the top quarter of most thoroughly answered questions. Questions at this depth typically involve multi-faceted topics requiring nuanced explanation.
Frequently Asked Questions
Is there a simple explanation for why stocks worth anything? (particularly ones that don't pay dividend)?
As a shareholder you are a part owner of the company and are entitled to what an owner would be entitled to(profits from the company). In the short term the company may not have profits, or wants to grow the business so the Board of…
How detailed is this explanation compared to similar Society questions?
This is one of the most thorough answer at 153 words, ranked #32 of 500 Society questions by depth. The key concepts covered are owner, company, profits.
What approach does this answer take to explain stocks worth anything? (particularly ones that don't pay div?
The explanation uses contrasting perspectives across 153 words. It is categorized under Society and addresses the question through 1 analytical lens.