[pjc50]

> since 1928 dividends plus inflation accounted for 99.7% of the nominal wealth produced, as of 2008, by investing in stocks.

OK, so strip out inflation to get real rather than nominal returns, and it becomes "stock investment produces almost all its returns in dividends over a long period". Which is .. not that surprising? Because dividends are ultimately why people buy stocks in the first place? The present value of a stock is after all the "net present value" of the expected flow of dividends.

[autokad]

> Because dividends are ultimately why people buy stocks in the first place?

I would disagree, I feel like the mojority of stonk owners think dividends are passe companies, and a real company would reinvest its earnings or buy back stock. I disagree with these people. I think a company that has no intention of paying a dividend is merely an over produced digital collectible.

[Invictus0]

You disagree that buybacks are more tax efficient than dividends?

> I think a company that has no intention of paying a dividend is merely an over produced digital collectible.

So, Amazon is a NFT?

[pixl97]

If Amazon cannot grow, then yes, it's stock price will go down losing you more than you bought the shares for.

[chii]

Therefore, any shareholders of amazon would look to predict when amazon would stop growing, and sell right before the prices have adjusted.

[autokad]

stock buybacks are more tax efficient than dividends, but I disagree they are remotely the same thing. There is plenty of empirical evidence that a stock buyback does little to the stock price in the long run, and I would much rather have the decision what to do with the money even though its less tax efficient.

An NFT is a good way to put it.

[Invictus0]

So if Amazon bought back so many shares so that there were just one left on the public market, you think that the last share would trade for $97?

[pjc50]

I count stock buybacks as "dividends relabelled for tax purposes".

[astrange]

There's other ways to return capital. Another larger company, or Elon Musk, might buy them.

[ghaff]

I think it probably would surprise a lot of people. But you're absolutely right that the Finance 101 argument for how a stock should be valued is the net present value of its dividend stream. Largely fail at the individual firm level of course for various reasons (and is a naive estimate for those many reasons) but it shouldn't be too surprising that it works in aggregate.