From: gts (gts@optexinc.com)
Date: Fri Sep 13 2002 - 13:05:13 MDT
Dan,
I missed this statement of yours in your previous message:
> whenever anybody thinks they want cash more than
> future dividends they expect to get, they'll just sell
> the stock to somebody else who wants/expects more future
> dividends... forever.
That is almost but not quite correct. To be correct, you need to replace
the word "dividends" with either "earnings" or "profits."
Congress could perhaps someday for some inexplicable reason forever ban
the payment of dividends by public corporations. We could even implement
the ban as an amendment to the US Constitution. Would the stockmarket
then grind to a halt? Absolutely not! Prices would change radically, up
or down depending on whether the given corporation formerly paid a
dividend, but the market for all stocks would keep on going like the
Energizer Bunny Rabbit.
There would also be a huge rally in bonds, as investors in need of
current income would sell what were once dividend-paying stocks to buy
interest-paying bonds.
-gts
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