[enether]

The modern stock market is largely fuelled by speculation.

Companies don't pay dividends, so even if you have a claim on the underlying cash flow - you aren't really getting it in practice.

Further out, some pieces of equities are so overvalued that you're basically paying for 99% speculation rather than the underlying cash flow.

It's a spectrum.

[graeme]

A buyback is functionally equivalent to a dividend except it is more tax efficient. Much of the decline in dividends has been the rise of buybacks.

[TeaBrain]

Buybacks are functionally accepted as an alternative to dividends, but are not really equivalents. An important distinction is that buybacks not only benefit the shareholders like dividends do, but also benefit the perception of the company's performance by boosting per share financial figures, due to less shares remaining following the buyback. This incentivizes the leadership of a company more towards buybacks, as it not only potentially increases the value of their largely stock based compensation, but it also makes their performance look better.

[bornfreddy]

Off topic, but I wish finance sites published "buyback yield" metric or equivalent (what percentage of total stock value was bought back in last quarter / year / TTM. If buybacks are treated as dividends, investors should be able to assess their returns in a similar way, imho.

[strix_varius]

It's true that the modern stock market is a spectrum ranging from highly speculative "growth stocks" to blue chips / income stocks. Bonds are even further down the safe-claim-to-future-money spectrum.

While your argument is technically correct, there's a world of difference between cryptocurrency where the inherent value is definitionally $0, and stocks/bonds/commodities/real estate where the inherent value is almost always above $0 and can, if you want, be a large percentage of its total price. That allows an investor to determine their own level of speculative risk.