Share Holders are an inconvenience to the company??
Posted in the Investing Forum
Since: Nov 10
#1 Nov 18, 2010
I had this conversation a while back with a fellow I met online in a stock chat room.
Me: It doesn’t make sense, why do most public companies prefer not to give out large dividends?
Stranger: its simple really, they want to invest the profits back into the company so they can expand and grow more.
Me: yeah okay, but if I was a shareholder of a company, im investing in the company for the sole purpose of getting money from my investment, I want to see some profits.
Stranger: hmm...One of the main reasons if not at times only reason companies issue stock is to raise capital. You’re just an inconvenience to the company after the stock is bought.
Me: excuse me? Why am I investing then, I have no intention about the “growth” of a company if I am getting nothing out of it financially.
Stranger: Its true you probably won’t get rich out of dividends, so you have to hope the stocks go up.
Me: So the company I supposedly own part of aint giving me s***, so I have to pray my stock price increases for me to make any substantial money?
Stranger: That’s right, but if it goes down your screwed
Me: why on earth do I own stocks again?
Stranger: because you want to be rich
The only reason most people buy stocks is to sell it in the end.
Buy Hold Sell……… that’s what owning a share in a company is all about.
Do you agree? or is there something im not seeing here.
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