Subject: Re: a stocks and dividends question
From: Lynn Winebarger <owinebar@free-expression.org>
Date: Fri, 10 Jan 2003 23:09:40 -0500

On Friday 10 January 2003 05:07, Stephen J. Turnbull wrote:
> >>>>> "robin" == robin  <robin@roblimo.com> writes:
> 
>     >> From that financial perspective, stock valuation, if it isn't a
>     >> pyramid scheme, has to be rooted in expected dividends.
> 
>     robin> Well, yes.
> 
> Well, no.  There must be the _potential_ for dividends, but there is
> no reason why the investors must call in that potential.  This will
> depend on details of the company's strategy, etc.  Consider a startup
> targeting being bought out by a large competitor as an extreme case.
> 
> See http://turnbull.sk.tsukuba.ac.jp/Tools/Attitude/how-growth-stocks-work.html.
> 
    Small quote from there:
-------------
    Second, the wealth is productively invested, rather than simply bank float that
cannot be productive.
-------------
    Now, how do you know the wealth is productively invested?  Do you mean that
the reinvestment grounds out into some traditional, concrete notion of productive?
Otherwise, how are MLM's excluded?  More importantly, even if MLM's are theoretically
excluded, how does the investor discriminate between the productive reinvestor and
the MLM?
    By the way, what do you mean by a "bank float"?  If you mean just depositing it
in a bank, why is that an unproductive use of the capital?  As far as I know, banks
don't just pay interest so the owners can gaze on the piles of currency with avaristic
glee, but loan it out for (productive) use in the economy.  In this sense, a bank 
account (particularly with a local bank, if you're interested in the health of the local
economy) can be very productive.

Lynn