I have been trading and investing in stocks for many years, but I still have a question that I hope somebody can answer.
The number of companies in the market is growing everyday more and more raising the number of outstandig shares to trillions.
A single company can also make second offerings diluting that way the value of its stocks.
If this process of endless dilution doesn’t end, and it looks to me like it’ll never end, why would stocks be worth anything in the future?
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4 Comments
Stocks are worthless.
Their value is imaginary.
That’s why the bottom can fall out of the market at any time.
Regardless of future dilution for a company, or its possible new competition, the company in question will always have value, as long as it remains an ongoing entity making money. As long as there is one sole in the world who believes in this company it has value.
Obviously you know this, since you say you have invested for years. You put your money into something you saw has value today and even more value tomorrow.
because the company is expanding
stocks are worth the present value of their future dividend cash flow